Bill Amendment: IL SB1469 | 2017-2018 | 100th General Assembly

NOTE: For additional amemendments please see the Bill Drafting List

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Bill Title: FARMERS' MARKETS-COTTAGE FOOD

Status: 2019-01-15 - Sent to the Governor [SB1469 Detail]

Download: Illinois-2017-SB1469-House_Amendment_001.html

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Rep. Gregory Harris

Filed: 11/28/2018

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AMENDMENT TO SENATE BILL 1469
AMENDMENT NO. ______. Amend Senate Bill 1469 by replacing
everything after the enacting clause with the following:
"Section 5. The Illinois Administrative Procedure Act is
amended by changing Section 5-45 as follows:
(5 ILCS 100/5-45) (from Ch. 127, par. 1005-45)
Sec. 5-45. Emergency rulemaking.
(a) "Emergency" means the existence of any situation that
any agency finds reasonably constitutes a threat to the public
interest, safety, or welfare.
(b) If any agency finds that an emergency exists that
requires adoption of a rule upon fewer days than is required by
Section 5-40 and states in writing its reasons for that
finding, the agency may adopt an emergency rule without prior
notice or hearing upon filing a notice of emergency rulemaking
with the Secretary of State under Section 5-70. The notice

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shall include the text of the emergency rule and shall be
published in the Illinois Register. Consent orders or other
court orders adopting settlements negotiated by an agency may
be adopted under this Section. Subject to applicable
constitutional or statutory provisions, an emergency rule
becomes effective immediately upon filing under Section 5-65 or
at a stated date less than 10 days thereafter. The agency's
finding and a statement of the specific reasons for the finding
shall be filed with the rule. The agency shall take reasonable
and appropriate measures to make emergency rules known to the
persons who may be affected by them.
(c) An emergency rule may be effective for a period of not
longer than 150 days, but the agency's authority to adopt an
identical rule under Section 5-40 is not precluded. No
emergency rule may be adopted more than once in any 24-month
period, except that this limitation on the number of emergency
rules that may be adopted in a 24-month period does not apply
to (i) emergency rules that make additions to and deletions
from the Drug Manual under Section 5-5.16 of the Illinois
Public Aid Code or the generic drug formulary under Section
3.14 of the Illinois Food, Drug and Cosmetic Act, (ii)
emergency rules adopted by the Pollution Control Board before
July 1, 1997 to implement portions of the Livestock Management
Facilities Act, (iii) emergency rules adopted by the Illinois
Department of Public Health under subsections (a) through (i)
of Section 2 of the Department of Public Health Act when

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necessary to protect the public's health, (iv) emergency rules
adopted pursuant to subsection (n) of this Section, (v)
emergency rules adopted pursuant to subsection (o) of this
Section, or (vi) emergency rules adopted pursuant to subsection
(c-5) of this Section. Two or more emergency rules having
substantially the same purpose and effect shall be deemed to be
a single rule for purposes of this Section.
(c-5) To facilitate the maintenance of the program of group
health benefits provided to annuitants, survivors, and retired
employees under the State Employees Group Insurance Act of
1971, rules to alter the contributions to be paid by the State,
annuitants, survivors, retired employees, or any combination
of those entities, for that program of group health benefits,
shall be adopted as emergency rules. The adoption of those
rules shall be considered an emergency and necessary for the
public interest, safety, and welfare.
(d) In order to provide for the expeditious and timely
implementation of the State's fiscal year 1999 budget,
emergency rules to implement any provision of Public Act 90-587
or 90-588 or any other budget initiative for fiscal year 1999
may be adopted in accordance with this Section by the agency
charged with administering that provision or initiative,
except that the 24-month limitation on the adoption of
emergency rules and the provisions of Sections 5-115 and 5-125
do not apply to rules adopted under this subsection (d). The
adoption of emergency rules authorized by this subsection (d)

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shall be deemed to be necessary for the public interest,
safety, and welfare.
(e) In order to provide for the expeditious and timely
implementation of the State's fiscal year 2000 budget,
emergency rules to implement any provision of Public Act 91-24
or any other budget initiative for fiscal year 2000 may be
adopted in accordance with this Section by the agency charged
with administering that provision or initiative, except that
the 24-month limitation on the adoption of emergency rules and
the provisions of Sections 5-115 and 5-125 do not apply to
rules adopted under this subsection (e). The adoption of
emergency rules authorized by this subsection (e) shall be
deemed to be necessary for the public interest, safety, and
welfare.
(f) In order to provide for the expeditious and timely
implementation of the State's fiscal year 2001 budget,
emergency rules to implement any provision of Public Act 91-712
or any other budget initiative for fiscal year 2001 may be
adopted in accordance with this Section by the agency charged
with administering that provision or initiative, except that
the 24-month limitation on the adoption of emergency rules and
the provisions of Sections 5-115 and 5-125 do not apply to
rules adopted under this subsection (f). The adoption of
emergency rules authorized by this subsection (f) shall be
deemed to be necessary for the public interest, safety, and
welfare.

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(g) In order to provide for the expeditious and timely
implementation of the State's fiscal year 2002 budget,
emergency rules to implement any provision of Public Act 92-10
or any other budget initiative for fiscal year 2002 may be
adopted in accordance with this Section by the agency charged
with administering that provision or initiative, except that
the 24-month limitation on the adoption of emergency rules and
the provisions of Sections 5-115 and 5-125 do not apply to
rules adopted under this subsection (g). The adoption of
emergency rules authorized by this subsection (g) shall be
deemed to be necessary for the public interest, safety, and
welfare.
(h) In order to provide for the expeditious and timely
implementation of the State's fiscal year 2003 budget,
emergency rules to implement any provision of Public Act 92-597
or any other budget initiative for fiscal year 2003 may be
adopted in accordance with this Section by the agency charged
with administering that provision or initiative, except that
the 24-month limitation on the adoption of emergency rules and
the provisions of Sections 5-115 and 5-125 do not apply to
rules adopted under this subsection (h). The adoption of
emergency rules authorized by this subsection (h) shall be
deemed to be necessary for the public interest, safety, and
welfare.
(i) In order to provide for the expeditious and timely
implementation of the State's fiscal year 2004 budget,

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emergency rules to implement any provision of Public Act 93-20
or any other budget initiative for fiscal year 2004 may be
adopted in accordance with this Section by the agency charged
with administering that provision or initiative, except that
the 24-month limitation on the adoption of emergency rules and
the provisions of Sections 5-115 and 5-125 do not apply to
rules adopted under this subsection (i). The adoption of
emergency rules authorized by this subsection (i) shall be
deemed to be necessary for the public interest, safety, and
welfare.
(j) In order to provide for the expeditious and timely
implementation of the provisions of the State's fiscal year
2005 budget as provided under the Fiscal Year 2005 Budget
Implementation (Human Services) Act, emergency rules to
implement any provision of the Fiscal Year 2005 Budget
Implementation (Human Services) Act may be adopted in
accordance with this Section by the agency charged with
administering that provision, except that the 24-month
limitation on the adoption of emergency rules and the
provisions of Sections 5-115 and 5-125 do not apply to rules
adopted under this subsection (j). The Department of Public Aid
may also adopt rules under this subsection (j) necessary to
administer the Illinois Public Aid Code and the Children's
Health Insurance Program Act. The adoption of emergency rules
authorized by this subsection (j) shall be deemed to be
necessary for the public interest, safety, and welfare.

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(k) In order to provide for the expeditious and timely
implementation of the provisions of the State's fiscal year
2006 budget, emergency rules to implement any provision of
Public Act 94-48 or any other budget initiative for fiscal year
2006 may be adopted in accordance with this Section by the
agency charged with administering that provision or
initiative, except that the 24-month limitation on the adoption
of emergency rules and the provisions of Sections 5-115 and
5-125 do not apply to rules adopted under this subsection (k).
The Department of Healthcare and Family Services may also adopt
rules under this subsection (k) necessary to administer the
Illinois Public Aid Code, the Senior Citizens and Persons with
Disabilities Property Tax Relief Act, the Senior Citizens and
Disabled Persons Prescription Drug Discount Program Act (now
the Illinois Prescription Drug Discount Program Act), and the
Children's Health Insurance Program Act. The adoption of
emergency rules authorized by this subsection (k) shall be
deemed to be necessary for the public interest, safety, and
welfare.
(l) In order to provide for the expeditious and timely
implementation of the provisions of the State's fiscal year
2007 budget, the Department of Healthcare and Family Services
may adopt emergency rules during fiscal year 2007, including
rules effective July 1, 2007, in accordance with this
subsection to the extent necessary to administer the
Department's responsibilities with respect to amendments to

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the State plans and Illinois waivers approved by the federal
Centers for Medicare and Medicaid Services necessitated by the
requirements of Title XIX and Title XXI of the federal Social
Security Act. The adoption of emergency rules authorized by
this subsection (l) shall be deemed to be necessary for the
public interest, safety, and welfare.
(m) In order to provide for the expeditious and timely
implementation of the provisions of the State's fiscal year
2008 budget, the Department of Healthcare and Family Services
may adopt emergency rules during fiscal year 2008, including
rules effective July 1, 2008, in accordance with this
subsection to the extent necessary to administer the
Department's responsibilities with respect to amendments to
the State plans and Illinois waivers approved by the federal
Centers for Medicare and Medicaid Services necessitated by the
requirements of Title XIX and Title XXI of the federal Social
Security Act. The adoption of emergency rules authorized by
this subsection (m) shall be deemed to be necessary for the
public interest, safety, and welfare.
(n) In order to provide for the expeditious and timely
implementation of the provisions of the State's fiscal year
2010 budget, emergency rules to implement any provision of
Public Act 96-45 or any other budget initiative authorized by
the 96th General Assembly for fiscal year 2010 may be adopted
in accordance with this Section by the agency charged with
administering that provision or initiative. The adoption of

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emergency rules authorized by this subsection (n) shall be
deemed to be necessary for the public interest, safety, and
welfare. The rulemaking authority granted in this subsection
(n) shall apply only to rules promulgated during Fiscal Year
2010.
(o) In order to provide for the expeditious and timely
implementation of the provisions of the State's fiscal year
2011 budget, emergency rules to implement any provision of
Public Act 96-958 or any other budget initiative authorized by
the 96th General Assembly for fiscal year 2011 may be adopted
in accordance with this Section by the agency charged with
administering that provision or initiative. The adoption of
emergency rules authorized by this subsection (o) is deemed to
be necessary for the public interest, safety, and welfare. The
rulemaking authority granted in this subsection (o) applies
only to rules promulgated on or after July 1, 2010 (the
effective date of Public Act 96-958) through June 30, 2011.
(p) In order to provide for the expeditious and timely
implementation of the provisions of Public Act 97-689,
emergency rules to implement any provision of Public Act 97-689
may be adopted in accordance with this subsection (p) by the
agency charged with administering that provision or
initiative. The 150-day limitation of the effective period of
emergency rules does not apply to rules adopted under this
subsection (p), and the effective period may continue through
June 30, 2013. The 24-month limitation on the adoption of

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emergency rules does not apply to rules adopted under this
subsection (p). The adoption of emergency rules authorized by
this subsection (p) is deemed to be necessary for the public
interest, safety, and welfare.
(q) In order to provide for the expeditious and timely
implementation of the provisions of Articles 7, 8, 9, 11, and
12 of Public Act 98-104, emergency rules to implement any
provision of Articles 7, 8, 9, 11, and 12 of Public Act 98-104
may be adopted in accordance with this subsection (q) by the
agency charged with administering that provision or
initiative. The 24-month limitation on the adoption of
emergency rules does not apply to rules adopted under this
subsection (q). The adoption of emergency rules authorized by
this subsection (q) is deemed to be necessary for the public
interest, safety, and welfare.
(r) In order to provide for the expeditious and timely
implementation of the provisions of Public Act 98-651,
emergency rules to implement Public Act 98-651 may be adopted
in accordance with this subsection (r) by the Department of
Healthcare and Family Services. The 24-month limitation on the
adoption of emergency rules does not apply to rules adopted
under this subsection (r). The adoption of emergency rules
authorized by this subsection (r) is deemed to be necessary for
the public interest, safety, and welfare.
(s) In order to provide for the expeditious and timely
implementation of the provisions of Sections 5-5b.1 and 5A-2 of

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the Illinois Public Aid Code, emergency rules to implement any
provision of Section 5-5b.1 or Section 5A-2 of the Illinois
Public Aid Code may be adopted in accordance with this
subsection (s) by the Department of Healthcare and Family
Services. The rulemaking authority granted in this subsection
(s) shall apply only to those rules adopted prior to July 1,
2015. Notwithstanding any other provision of this Section, any
emergency rule adopted under this subsection (s) shall only
apply to payments made for State fiscal year 2015. The adoption
of emergency rules authorized by this subsection (s) is deemed
to be necessary for the public interest, safety, and welfare.
(t) In order to provide for the expeditious and timely
implementation of the provisions of Article II of Public Act
99-6, emergency rules to implement the changes made by Article
II of Public Act 99-6 to the Emergency Telephone System Act may
be adopted in accordance with this subsection (t) by the
Department of State Police. The rulemaking authority granted in
this subsection (t) shall apply only to those rules adopted
prior to July 1, 2016. The 24-month limitation on the adoption
of emergency rules does not apply to rules adopted under this
subsection (t). The adoption of emergency rules authorized by
this subsection (t) is deemed to be necessary for the public
interest, safety, and welfare.
(u) In order to provide for the expeditious and timely
implementation of the provisions of the Burn Victims Relief
Act, emergency rules to implement any provision of the Act may

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be adopted in accordance with this subsection (u) by the
Department of Insurance. The rulemaking authority granted in
this subsection (u) shall apply only to those rules adopted
prior to December 31, 2015. The adoption of emergency rules
authorized by this subsection (u) is deemed to be necessary for
the public interest, safety, and welfare.
(v) In order to provide for the expeditious and timely
implementation of the provisions of Public Act 99-516,
emergency rules to implement Public Act 99-516 may be adopted
in accordance with this subsection (v) by the Department of
Healthcare and Family Services. The 24-month limitation on the
adoption of emergency rules does not apply to rules adopted
under this subsection (v). The adoption of emergency rules
authorized by this subsection (v) is deemed to be necessary for
the public interest, safety, and welfare.
(w) In order to provide for the expeditious and timely
implementation of the provisions of Public Act 99-796,
emergency rules to implement the changes made by Public Act
99-796 may be adopted in accordance with this subsection (w) by
the Adjutant General. The adoption of emergency rules
authorized by this subsection (w) is deemed to be necessary for
the public interest, safety, and welfare.
(x) In order to provide for the expeditious and timely
implementation of the provisions of Public Act 99-906,
emergency rules to implement subsection (i) of Section 16-115D,
subsection (g) of Section 16-128A, and subsection (a) of

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Section 16-128B of the Public Utilities Act may be adopted in
accordance with this subsection (x) by the Illinois Commerce
Commission. The rulemaking authority granted in this
subsection (x) shall apply only to those rules adopted within
180 days after June 1, 2017 (the effective date of Public Act
99-906). The adoption of emergency rules authorized by this
subsection (x) is deemed to be necessary for the public
interest, safety, and welfare.
(y) In order to provide for the expeditious and timely
implementation of the provisions of Public Act 100-23 this
amendatory Act of the 100th General Assembly, emergency rules
to implement the changes made by Public Act 100-23 this
amendatory Act of the 100th General Assembly to Section 4.02 of
the Illinois Act on the Aging, Sections 5.5.4 and 5-5.4i of the
Illinois Public Aid Code, Section 55-30 of the Alcoholism and
Other Drug Abuse and Dependency Act, and Sections 74 and 75 of
the Mental Health and Developmental Disabilities
Administrative Act may be adopted in accordance with this
subsection (y) by the respective Department. The adoption of
emergency rules authorized by this subsection (y) is deemed to
be necessary for the public interest, safety, and welfare.
(z) In order to provide for the expeditious and timely
implementation of the provisions of Public Act 100-554 this
amendatory Act of the 100th General Assembly, emergency rules
to implement the changes made by Public Act 100-554 this
amendatory Act of the 100th General Assembly to Section 4.7 of

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the Lobbyist Registration Act may be adopted in accordance with
this subsection (z) by the Secretary of State. The adoption of
emergency rules authorized by this subsection (z) is deemed to
be necessary for the public interest, safety, and welfare.
(aa) In order to provide for the expeditious and timely
initial implementation of the changes made to Articles 5, 5A,
12, and 14 of the Illinois Public Aid Code under the provisions
of Public Act 100-581 this amendatory Act of the 100th General
Assembly, the Department of Healthcare and Family Services may
adopt emergency rules in accordance with this subsection (aa).
The 24-month limitation on the adoption of emergency rules does
not apply to rules to initially implement the changes made to
Articles 5, 5A, 12, and 14 of the Illinois Public Aid Code
adopted under this subsection (aa). The adoption of emergency
rules authorized by this subsection (aa) is deemed to be
necessary for the public interest, safety, and welfare.
(bb) In order to provide for the expeditious and timely
implementation of the provisions of Public Act 100-587 this
amendatory Act of the 100th General Assembly, emergency rules
to implement the changes made by Public Act 100-587 this
amendatory Act of the 100th General Assembly to Section 4.02 of
the Illinois Act on the Aging, Sections 5.5.4 and 5-5.4i of the
Illinois Public Aid Code, subsection (b) of Section 55-30 of
the Alcoholism and Other Drug Abuse and Dependency Act, Section
5-104 of the Specialized Mental Health Rehabilitation Act of
2013, and Section 75 and subsection (b) of Section 74 of the

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Mental Health and Developmental Disabilities Administrative
Act may be adopted in accordance with this subsection (bb) by
the respective Department. The adoption of emergency rules
authorized by this subsection (bb) is deemed to be necessary
for the public interest, safety, and welfare.
(cc) (bb) In order to provide for the expeditious and
timely implementation of the provisions of Public Act 100-587
this amendatory Act of the 100th General Assembly, emergency
rules may be adopted in accordance with this subsection (cc)
(bb) to implement the changes made by Public Act 100-587 this
amendatory Act of the 100th General Assembly to: Sections
14-147.5 and 14-147.6 of the Illinois Pension Code by the Board
created under Article 14 of the Code; Sections 15-185.5 and
15-185.6 of the Illinois Pension Code by the Board created
under Article 15 of the Code; and Sections 16-190.5 and
16-190.6 of the Illinois Pension Code by the Board created
under Article 16 of the Code. The adoption of emergency rules
authorized by this subsection (cc) (bb) is deemed to be
necessary for the public interest, safety, and welfare.
(dd) (aa) In order to provide for the expeditious and
timely implementation of the provisions of Public Act 100-864
this amendatory Act of the 100th General Assembly, emergency
rules to implement the changes made by Public Act 100-864 this
amendatory Act of the 100th General Assembly to Section 3.35 of
the Newborn Metabolic Screening Act may be adopted in
accordance with this subsection (dd) (aa) by the Secretary of

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State. The adoption of emergency rules authorized by this
subsection (dd) (aa) is deemed to be necessary for the public
interest, safety, and welfare.
(ee) In order to provide for the expeditious and timely
initial implementation of the changes made to Articles 5A and
14 of the Illinois Public Aid Code under the provisions of this
amendatory Act of the 100th General Assembly, the Department of
Healthcare and Family Services may on a one-time-only basis
adopt emergency rules in accordance with this subsection (ee).
The 24-month limitation on the adoption of emergency rules does
not apply to rules to initially implement the changes made to
Articles 5A and 14 of the Illinois Public Aid Code adopted
under this subsection (ee). The adoption of emergency rules
authorized by this subsection (ee) is deemed to be necessary
for the public interest, safety, and welfare.
(Source: P.A. 99-2, eff. 3-26-15; 99-6, eff. 1-1-16; 99-143,
eff. 7-27-15; 99-455, eff. 1-1-16; 99-516, eff. 6-30-16;
99-642, eff. 7-28-16; 99-796, eff. 1-1-17; 99-906, eff. 6-1-17;
100-23, eff. 7-6-17; 100-554, eff. 11-16-17; 100-581, eff.
3-12-18; 100-587, Article 95, Section 95-5, eff. 6-4-18;
100-587, Article 110, Section 110-5, eff. 6-4-18; 100-864, eff.
8-14-18; revised 10-18-18.)
Section 15. The Use Tax Act is amended by changing Section
3-8 as follows:

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(35 ILCS 105/3-8)
Sec. 3-8. Hospital exemption.
(a) Until July 1, 2022, tangible Tangible personal property
sold to or used by a hospital owner that owns one or more
hospitals licensed under the Hospital Licensing Act or operated
under the University of Illinois Hospital Act, or a hospital
affiliate that is not already exempt under another provision of
this Act and meets the criteria for an exemption under this
Section, is exempt from taxation under this Act.
(b) A hospital owner or hospital affiliate satisfies the
conditions for an exemption under this Section if the value of
qualified services or activities listed in subsection (c) of
this Section for the hospital year equals or exceeds the
relevant hospital entity's estimated property tax liability,
without regard to any property tax exemption granted under
Section 15-86 of the Property Tax Code, for the calendar year
in which exemption or renewal of exemption is sought. For
purposes of making the calculations required by this subsection
(b), if the relevant hospital entity is a hospital owner that
owns more than one hospital, the value of the services or
activities listed in subsection (c) shall be calculated on the
basis of only those services and activities relating to the
hospital that includes the subject property, and the relevant
hospital entity's estimated property tax liability shall be
calculated only with respect to the properties comprising that
hospital. In the case of a multi-state hospital system or

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hospital affiliate, the value of the services or activities
listed in subsection (c) shall be calculated on the basis of
only those services and activities that occur in Illinois and
the relevant hospital entity's estimated property tax
liability shall be calculated only with respect to its property
located in Illinois.
(c) The following services and activities shall be
considered for purposes of making the calculations required by
subsection (b):
(1) Charity care. Free or discounted services provided
pursuant to the relevant hospital entity's financial
assistance policy, measured at cost, including discounts
provided under the Hospital Uninsured Patient Discount
Act.
(2) Health services to low-income and underserved
individuals. Other unreimbursed costs of the relevant
hospital entity for providing without charge, paying for,
or subsidizing goods, activities, or services for the
purpose of addressing the health of low-income or
underserved individuals. Those activities or services may
include, but are not limited to: financial or in-kind
support to affiliated or unaffiliated hospitals, hospital
affiliates, community clinics, or programs that treat
low-income or underserved individuals; paying for or
subsidizing health care professionals who care for
low-income or underserved individuals; providing or

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subsidizing outreach or educational services to low-income
or underserved individuals for disease management and
prevention; free or subsidized goods, supplies, or
services needed by low-income or underserved individuals
because of their medical condition; and prenatal or
childbirth outreach to low-income or underserved persons.
(3) Subsidy of State or local governments. Direct or
indirect financial or in-kind subsidies of State or local
governments by the relevant hospital entity that pay for or
subsidize activities or programs related to health care for
low-income or underserved individuals.
(4) Support for State health care programs for
low-income individuals. At the election of the hospital
applicant for each applicable year, either (A) 10% of
payments to the relevant hospital entity and any hospital
affiliate designated by the relevant hospital entity
(provided that such hospital affiliate's operations
provide financial or operational support for or receive
financial or operational support from the relevant
hospital entity) under Medicaid or other means-tested
programs, including, but not limited to, General
Assistance, the Covering ALL KIDS Health Insurance Act, and
the State Children's Health Insurance Program or (B) the
amount of subsidy provided by the relevant hospital entity
and any hospital affiliate designated by the relevant
hospital entity (provided that such hospital affiliate's

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operations provide financial or operational support for or
receive financial or operational support from the relevant
hospital entity) to State or local government in treating
Medicaid recipients and recipients of means-tested
programs, including but not limited to General Assistance,
the Covering ALL KIDS Health Insurance Act, and the State
Children's Health Insurance Program. The amount of subsidy
for purpose of this item (4) is calculated in the same
manner as unreimbursed costs are calculated for Medicaid
and other means-tested government programs in the Schedule
H of IRS Form 990 in effect on the effective date of this
amendatory Act of the 97th General Assembly.
(5) Dual-eligible subsidy. The amount of subsidy
provided to government by treating dual-eligible
Medicare/Medicaid patients. The amount of subsidy for
purposes of this item (5) is calculated by multiplying the
relevant hospital entity's unreimbursed costs for
Medicare, calculated in the same manner as determined in
the Schedule H of IRS Form 990 in effect on the effective
date of this amendatory Act of the 97th General Assembly,
by the relevant hospital entity's ratio of dual-eligible
patients to total Medicare patients.
(6) Relief of the burden of government related to
health care. Except to the extent otherwise taken into
account in this subsection, the portion of unreimbursed
costs of the relevant hospital entity attributable to

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providing, paying for, or subsidizing goods, activities,
or services that relieve the burden of government related
to health care for low-income individuals. Such activities
or services shall include, but are not limited to,
providing emergency, trauma, burn, neonatal, psychiatric,
rehabilitation, or other special services; providing
medical education; and conducting medical research or
training of health care professionals. The portion of those
unreimbursed costs attributable to benefiting low-income
individuals shall be determined using the ratio calculated
by adding the relevant hospital entity's costs
attributable to charity care, Medicaid, other means-tested
government programs, Medicare patients with disabilities
under age 65, and dual-eligible Medicare/Medicaid patients
and dividing that total by the relevant hospital entity's
total costs. Such costs for the numerator and denominator
shall be determined by multiplying gross charges by the
cost to charge ratio taken from the hospital's most
recently filed Medicare cost report (CMS 2252-10
Worksheet, Part I). In the case of emergency services, the
ratio shall be calculated using costs (gross charges
multiplied by the cost to charge ratio taken from the
hospital's most recently filed Medicare cost report (CMS
2252-10 Worksheet, Part I)) of patients treated in the
relevant hospital entity's emergency department.
(7) Any other activity by the relevant hospital entity

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that the Department determines relieves the burden of
government or addresses the health of low-income or
underserved individuals.
(d) The hospital applicant shall include information in its
exemption application establishing that it satisfies the
requirements of subsection (b). For purposes of making the
calculations required by subsection (b), the hospital
applicant may for each year elect to use either (1) the value
of the services or activities listed in subsection (e) for the
hospital year or (2) the average value of those services or
activities for the 3 fiscal years ending with the hospital
year. If the relevant hospital entity has been in operation for
less than 3 completed fiscal years, then the latter
calculation, if elected, shall be performed on a pro rata
basis.
(e) For purposes of making the calculations required by
this Section:
(1) particular services or activities eligible for
consideration under any of the paragraphs (1) through (7)
of subsection (c) may not be counted under more than one of
those paragraphs; and
(2) the amount of unreimbursed costs and the amount of
subsidy shall not be reduced by restricted or unrestricted
payments received by the relevant hospital entity as
contributions deductible under Section 170(a) of the
Internal Revenue Code.

10000SB1469ham001 - 23 - LRB100 09786 KTG 43635 a
(f) (Blank).
(g) Estimation of Exempt Property Tax Liability. The
estimated property tax liability used for the determination in
subsection (b) shall be calculated as follows:
(1) "Estimated property tax liability" means the
estimated dollar amount of property tax that would be owed,
with respect to the exempt portion of each of the relevant
hospital entity's properties that are already fully or
partially exempt, or for which an exemption in whole or in
part is currently being sought, and then aggregated as
applicable, as if the exempt portion of those properties
were subject to tax, calculated with respect to each such
property by multiplying:
(A) the lesser of (i) the actual assessed value, if
any, of the portion of the property for which an
exemption is sought or (ii) an estimated assessed value
of the exempt portion of such property as determined in
item (2) of this subsection (g), by
(B) the applicable State equalization rate
(yielding the equalized assessed value), by
(C) the applicable tax rate.
(2) The estimated assessed value of the exempt portion
of the property equals the sum of (i) the estimated fair
market value of buildings on the property, as determined in
accordance with subparagraphs (A) and (B) of this item (2),
multiplied by the applicable assessment factor, and (ii)

10000SB1469ham001 - 24 - LRB100 09786 KTG 43635 a
the estimated assessed value of the land portion of the
property, as determined in accordance with subparagraph
(C).
(A) The "estimated fair market value of buildings
on the property" means the replacement value of any
exempt portion of buildings on the property, minus
depreciation, determined utilizing the cost
replacement method whereby the exempt square footage
of all such buildings is multiplied by the replacement
cost per square foot for Class A Average building found
in the most recent edition of the Marshall & Swift
Valuation Services Manual, adjusted by any appropriate
current cost and local multipliers.
(B) Depreciation, for purposes of calculating the
estimated fair market value of buildings on the
property, is applied by utilizing a weighted mean life
for the buildings based on original construction and
assuming a 40-year life for hospital buildings and the
applicable life for other types of buildings as
specified in the American Hospital Association
publication "Estimated Useful Lives of Depreciable
Hospital Assets". In the case of hospital buildings,
the remaining life is divided by 40 and this ratio is
multiplied by the replacement cost of the buildings to
obtain an estimated fair market value of buildings. If
a hospital building is older than 35 years, a remaining

10000SB1469ham001 - 25 - LRB100 09786 KTG 43635 a
life of 5 years for residual value is assumed; and if a
building is less than 8 years old, a remaining life of
32 years is assumed.
(C) The estimated assessed value of the land
portion of the property shall be determined by
multiplying (i) the per square foot average of the
assessed values of three parcels of land (not including
farm land, and excluding the assessed value of the
improvements thereon) reasonably comparable to the
property, by (ii) the number of square feet comprising
the exempt portion of the property's land square
footage.
(3) The assessment factor, State equalization rate,
and tax rate (including any special factors such as
Enterprise Zones) used in calculating the estimated
property tax liability shall be for the most recent year
that is publicly available from the applicable chief county
assessment officer or officers at least 90 days before the
end of the hospital year.
(4) The method utilized to calculate estimated
property tax liability for purposes of this Section 15-86
shall not be utilized for the actual valuation, assessment,
or taxation of property pursuant to the Property Tax Code.
(h) For the purpose of this Section, the following terms
shall have the meanings set forth below:
(1) "Hospital" means any institution, place, building,

10000SB1469ham001 - 26 - LRB100 09786 KTG 43635 a
buildings on a campus, or other health care facility
located in Illinois that is licensed under the Hospital
Licensing Act and has a hospital owner.
(2) "Hospital owner" means a not-for-profit
corporation that is the titleholder of a hospital, or the
owner of the beneficial interest in an Illinois land trust
that is the titleholder of a hospital.
(3) "Hospital affiliate" means any corporation,
partnership, limited partnership, joint venture, limited
liability company, association or other organization,
other than a hospital owner, that directly or indirectly
controls, is controlled by, or is under common control with
one or more hospital owners and that supports, is supported
by, or acts in furtherance of the exempt health care
purposes of at least one of those hospital owners'
hospitals.
(4) "Hospital system" means a hospital and one or more
other hospitals or hospital affiliates related by common
control or ownership.
(5) "Control" relating to hospital owners, hospital
affiliates, or hospital systems means possession, direct
or indirect, of the power to direct or cause the direction
of the management and policies of the entity, whether
through ownership of assets, membership interest, other
voting or governance rights, by contract or otherwise.
(6) "Hospital applicant" means a hospital owner or

10000SB1469ham001 - 27 - LRB100 09786 KTG 43635 a
hospital affiliate that files an application for an
exemption or renewal of exemption under this Section.
(7) "Relevant hospital entity" means (A) the hospital
owner, in the case of a hospital applicant that is a
hospital owner, and (B) at the election of a hospital
applicant that is a hospital affiliate, either (i) the
hospital affiliate or (ii) the hospital system to which the
hospital applicant belongs, including any hospitals or
hospital affiliates that are related by common control or
ownership.
(8) "Subject property" means property used for the
calculation under subsection (b) of this Section.
(9) "Hospital year" means the fiscal year of the
relevant hospital entity, or the fiscal year of one of the
hospital owners in the hospital system if the relevant
hospital entity is a hospital system with members with
different fiscal years, that ends in the year for which the
exemption is sought.
(i) It is the intent of the General Assembly that any
exemptions taken, granted, or renewed under this Section prior
to the effective date of this amendatory Act of the 100th
General Assembly are hereby validated.
(Source: P.A. 98-463, eff. 8-16-13; 99-143, eff. 7-27-15.)
Section 20. The Service Use Tax Act is amended by changing
Section 3-8 as follows:

10000SB1469ham001 - 28 - LRB100 09786 KTG 43635 a
(35 ILCS 110/3-8)
Sec. 3-8. Hospital exemption.
(a) Until July 1, 2022, tangible Tangible personal property
sold to or used by a hospital owner that owns one or more
hospitals licensed under the Hospital Licensing Act or operated
under the University of Illinois Hospital Act, or a hospital
affiliate that is not already exempt under another provision of
this Act and meets the criteria for an exemption under this
Section, is exempt from taxation under this Act.
(b) A hospital owner or hospital affiliate satisfies the
conditions for an exemption under this Section if the value of
qualified services or activities listed in subsection (c) of
this Section for the hospital year equals or exceeds the
relevant hospital entity's estimated property tax liability,
without regard to any property tax exemption granted under
Section 15-86 of the Property Tax Code, for the calendar year
in which exemption or renewal of exemption is sought. For
purposes of making the calculations required by this subsection
(b), if the relevant hospital entity is a hospital owner that
owns more than one hospital, the value of the services or
activities listed in subsection (c) shall be calculated on the
basis of only those services and activities relating to the
hospital that includes the subject property, and the relevant
hospital entity's estimated property tax liability shall be
calculated only with respect to the properties comprising that

10000SB1469ham001 - 29 - LRB100 09786 KTG 43635 a
hospital. In the case of a multi-state hospital system or
hospital affiliate, the value of the services or activities
listed in subsection (c) shall be calculated on the basis of
only those services and activities that occur in Illinois and
the relevant hospital entity's estimated property tax
liability shall be calculated only with respect to its property
located in Illinois.
(c) The following services and activities shall be
considered for purposes of making the calculations required by
subsection (b):
(1) Charity care. Free or discounted services provided
pursuant to the relevant hospital entity's financial
assistance policy, measured at cost, including discounts
provided under the Hospital Uninsured Patient Discount
Act.
(2) Health services to low-income and underserved
individuals. Other unreimbursed costs of the relevant
hospital entity for providing without charge, paying for,
or subsidizing goods, activities, or services for the
purpose of addressing the health of low-income or
underserved individuals. Those activities or services may
include, but are not limited to: financial or in-kind
support to affiliated or unaffiliated hospitals, hospital
affiliates, community clinics, or programs that treat
low-income or underserved individuals; paying for or
subsidizing health care professionals who care for

10000SB1469ham001 - 30 - LRB100 09786 KTG 43635 a
low-income or underserved individuals; providing or
subsidizing outreach or educational services to low-income
or underserved individuals for disease management and
prevention; free or subsidized goods, supplies, or
services needed by low-income or underserved individuals
because of their medical condition; and prenatal or
childbirth outreach to low-income or underserved persons.
(3) Subsidy of State or local governments. Direct or
indirect financial or in-kind subsidies of State or local
governments by the relevant hospital entity that pay for or
subsidize activities or programs related to health care for
low-income or underserved individuals.
(4) Support for State health care programs for
low-income individuals. At the election of the hospital
applicant for each applicable year, either (A) 10% of
payments to the relevant hospital entity and any hospital
affiliate designated by the relevant hospital entity
(provided that such hospital affiliate's operations
provide financial or operational support for or receive
financial or operational support from the relevant
hospital entity) under Medicaid or other means-tested
programs, including, but not limited to, General
Assistance, the Covering ALL KIDS Health Insurance Act, and
the State Children's Health Insurance Program or (B) the
amount of subsidy provided by the relevant hospital entity
and any hospital affiliate designated by the relevant

10000SB1469ham001 - 31 - LRB100 09786 KTG 43635 a
hospital entity (provided that such hospital affiliate's
operations provide financial or operational support for or
receive financial or operational support from the relevant
hospital entity) to State or local government in treating
Medicaid recipients and recipients of means-tested
programs, including but not limited to General Assistance,
the Covering ALL KIDS Health Insurance Act, and the State
Children's Health Insurance Program. The amount of subsidy
for purposes of this item (4) is calculated in the same
manner as unreimbursed costs are calculated for Medicaid
and other means-tested government programs in the Schedule
H of IRS Form 990 in effect on the effective date of this
amendatory Act of the 97th General Assembly.
(5) Dual-eligible subsidy. The amount of subsidy
provided to government by treating dual-eligible
Medicare/Medicaid patients. The amount of subsidy for
purposes of this item (5) is calculated by multiplying the
relevant hospital entity's unreimbursed costs for
Medicare, calculated in the same manner as determined in
the Schedule H of IRS Form 990 in effect on the effective
date of this amendatory Act of the 97th General Assembly,
by the relevant hospital entity's ratio of dual-eligible
patients to total Medicare patients.
(6) Relief of the burden of government related to
health care. Except to the extent otherwise taken into
account in this subsection, the portion of unreimbursed

10000SB1469ham001 - 32 - LRB100 09786 KTG 43635 a
costs of the relevant hospital entity attributable to
providing, paying for, or subsidizing goods, activities,
or services that relieve the burden of government related
to health care for low-income individuals. Such activities
or services shall include, but are not limited to,
providing emergency, trauma, burn, neonatal, psychiatric,
rehabilitation, or other special services; providing
medical education; and conducting medical research or
training of health care professionals. The portion of those
unreimbursed costs attributable to benefiting low-income
individuals shall be determined using the ratio calculated
by adding the relevant hospital entity's costs
attributable to charity care, Medicaid, other means-tested
government programs, Medicare patients with disabilities
under age 65, and dual-eligible Medicare/Medicaid patients
and dividing that total by the relevant hospital entity's
total costs. Such costs for the numerator and denominator
shall be determined by multiplying gross charges by the
cost to charge ratio taken from the hospital's most
recently filed Medicare cost report (CMS 2252-10
Worksheet, Part I). In the case of emergency services, the
ratio shall be calculated using costs (gross charges
multiplied by the cost to charge ratio taken from the
hospital's most recently filed Medicare cost report (CMS
2252-10 Worksheet, Part I)) of patients treated in the
relevant hospital entity's emergency department.

10000SB1469ham001 - 33 - LRB100 09786 KTG 43635 a
(7) Any other activity by the relevant hospital entity
that the Department determines relieves the burden of
government or addresses the health of low-income or
underserved individuals.
(d) The hospital applicant shall include information in its
exemption application establishing that it satisfies the
requirements of subsection (b). For purposes of making the
calculations required by subsection (b), the hospital
applicant may for each year elect to use either (1) the value
of the services or activities listed in subsection (e) for the
hospital year or (2) the average value of those services or
activities for the 3 fiscal years ending with the hospital
year. If the relevant hospital entity has been in operation for
less than 3 completed fiscal years, then the latter
calculation, if elected, shall be performed on a pro rata
basis.
(e) For purposes of making the calculations required by
this Section:
(1) particular services or activities eligible for
consideration under any of the paragraphs (1) through (7)
of subsection (c) may not be counted under more than one of
those paragraphs; and
(2) the amount of unreimbursed costs and the amount of
subsidy shall not be reduced by restricted or unrestricted
payments received by the relevant hospital entity as
contributions deductible under Section 170(a) of the

10000SB1469ham001 - 34 - LRB100 09786 KTG 43635 a
Internal Revenue Code.
(f) (Blank).
(g) Estimation of Exempt Property Tax Liability. The
estimated property tax liability used for the determination in
subsection (b) shall be calculated as follows:
(1) "Estimated property tax liability" means the
estimated dollar amount of property tax that would be owed,
with respect to the exempt portion of each of the relevant
hospital entity's properties that are already fully or
partially exempt, or for which an exemption in whole or in
part is currently being sought, and then aggregated as
applicable, as if the exempt portion of those properties
were subject to tax, calculated with respect to each such
property by multiplying:
(A) the lesser of (i) the actual assessed value, if
any, of the portion of the property for which an
exemption is sought or (ii) an estimated assessed value
of the exempt portion of such property as determined in
item (2) of this subsection (g), by
(B) the applicable State equalization rate
(yielding the equalized assessed value), by
(C) the applicable tax rate.
(2) The estimated assessed value of the exempt portion
of the property equals the sum of (i) the estimated fair
market value of buildings on the property, as determined in
accordance with subparagraphs (A) and (B) of this item (2),

10000SB1469ham001 - 35 - LRB100 09786 KTG 43635 a
multiplied by the applicable assessment factor, and (ii)
the estimated assessed value of the land portion of the
property, as determined in accordance with subparagraph
(C).
(A) The "estimated fair market value of buildings
on the property" means the replacement value of any
exempt portion of buildings on the property, minus
depreciation, determined utilizing the cost
replacement method whereby the exempt square footage
of all such buildings is multiplied by the replacement
cost per square foot for Class A Average building found
in the most recent edition of the Marshall & Swift
Valuation Services Manual, adjusted by any appropriate
current cost and local multipliers.
(B) Depreciation, for purposes of calculating the
estimated fair market value of buildings on the
property, is applied by utilizing a weighted mean life
for the buildings based on original construction and
assuming a 40-year life for hospital buildings and the
applicable life for other types of buildings as
specified in the American Hospital Association
publication "Estimated Useful Lives of Depreciable
Hospital Assets". In the case of hospital buildings,
the remaining life is divided by 40 and this ratio is
multiplied by the replacement cost of the buildings to
obtain an estimated fair market value of buildings. If

10000SB1469ham001 - 36 - LRB100 09786 KTG 43635 a
a hospital building is older than 35 years, a remaining
life of 5 years for residual value is assumed; and if a
building is less than 8 years old, a remaining life of
32 years is assumed.
(C) The estimated assessed value of the land
portion of the property shall be determined by
multiplying (i) the per square foot average of the
assessed values of three parcels of land (not including
farm land, and excluding the assessed value of the
improvements thereon) reasonably comparable to the
property, by (ii) the number of square feet comprising
the exempt portion of the property's land square
footage.
(3) The assessment factor, State equalization rate,
and tax rate (including any special factors such as
Enterprise Zones) used in calculating the estimated
property tax liability shall be for the most recent year
that is publicly available from the applicable chief county
assessment officer or officers at least 90 days before the
end of the hospital year.
(4) The method utilized to calculate estimated
property tax liability for purposes of this Section 15-86
shall not be utilized for the actual valuation, assessment,
or taxation of property pursuant to the Property Tax Code.
(h) For the purpose of this Section, the following terms
shall have the meanings set forth below:

10000SB1469ham001 - 37 - LRB100 09786 KTG 43635 a
(1) "Hospital" means any institution, place, building,
buildings on a campus, or other health care facility
located in Illinois that is licensed under the Hospital
Licensing Act and has a hospital owner.
(2) "Hospital owner" means a not-for-profit
corporation that is the titleholder of a hospital, or the
owner of the beneficial interest in an Illinois land trust
that is the titleholder of a hospital.
(3) "Hospital affiliate" means any corporation,
partnership, limited partnership, joint venture, limited
liability company, association or other organization,
other than a hospital owner, that directly or indirectly
controls, is controlled by, or is under common control with
one or more hospital owners and that supports, is supported
by, or acts in furtherance of the exempt health care
purposes of at least one of those hospital owners'
hospitals.
(4) "Hospital system" means a hospital and one or more
other hospitals or hospital affiliates related by common
control or ownership.
(5) "Control" relating to hospital owners, hospital
affiliates, or hospital systems means possession, direct
or indirect, of the power to direct or cause the direction
of the management and policies of the entity, whether
through ownership of assets, membership interest, other
voting or governance rights, by contract or otherwise.

10000SB1469ham001 - 38 - LRB100 09786 KTG 43635 a
(6) "Hospital applicant" means a hospital owner or
hospital affiliate that files an application for an
exemption or renewal of exemption under this Section.
(7) "Relevant hospital entity" means (A) the hospital
owner, in the case of a hospital applicant that is a
hospital owner, and (B) at the election of a hospital
applicant that is a hospital affiliate, either (i) the
hospital affiliate or (ii) the hospital system to which the
hospital applicant belongs, including any hospitals or
hospital affiliates that are related by common control or
ownership.
(8) "Subject property" means property used for the
calculation under subsection (b) of this Section.
(9) "Hospital year" means the fiscal year of the
relevant hospital entity, or the fiscal year of one of the
hospital owners in the hospital system if the relevant
hospital entity is a hospital system with members with
different fiscal years, that ends in the year for which the
exemption is sought.
(i) It is the intent of the General Assembly that any
exemptions taken, granted, or renewed under this Section prior
to the effective date of this amendatory Act of the 100th
General Assembly are hereby validated.
(Source: P.A. 98-463, eff. 8-16-13; 99-143, eff. 7-27-15.)
Section 25. The Service Occupation Tax Act is amended by

10000SB1469ham001 - 39 - LRB100 09786 KTG 43635 a
changing Section 3-8 as follows:
(35 ILCS 115/3-8)
Sec. 3-8. Hospital exemption.
(a) Until July 1, 2022, tangible Tangible personal property
sold to or used by a hospital owner that owns one or more
hospitals licensed under the Hospital Licensing Act or operated
under the University of Illinois Hospital Act, or a hospital
affiliate that is not already exempt under another provision of
this Act and meets the criteria for an exemption under this
Section, is exempt from taxation under this Act.
(b) A hospital owner or hospital affiliate satisfies the
conditions for an exemption under this Section if the value of
qualified services or activities listed in subsection (c) of
this Section for the hospital year equals or exceeds the
relevant hospital entity's estimated property tax liability,
without regard to any property tax exemption granted under
Section 15-86 of the Property Tax Code, for the calendar year
in which exemption or renewal of exemption is sought. For
purposes of making the calculations required by this subsection
(b), if the relevant hospital entity is a hospital owner that
owns more than one hospital, the value of the services or
activities listed in subsection (c) shall be calculated on the
basis of only those services and activities relating to the
hospital that includes the subject property, and the relevant
hospital entity's estimated property tax liability shall be

10000SB1469ham001 - 40 - LRB100 09786 KTG 43635 a
calculated only with respect to the properties comprising that
hospital. In the case of a multi-state hospital system or
hospital affiliate, the value of the services or activities
listed in subsection (c) shall be calculated on the basis of
only those services and activities that occur in Illinois and
the relevant hospital entity's estimated property tax
liability shall be calculated only with respect to its property
located in Illinois.
(c) The following services and activities shall be
considered for purposes of making the calculations required by
subsection (b):
(1) Charity care. Free or discounted services provided
pursuant to the relevant hospital entity's financial
assistance policy, measured at cost, including discounts
provided under the Hospital Uninsured Patient Discount
Act.
(2) Health services to low-income and underserved
individuals. Other unreimbursed costs of the relevant
hospital entity for providing without charge, paying for,
or subsidizing goods, activities, or services for the
purpose of addressing the health of low-income or
underserved individuals. Those activities or services may
include, but are not limited to: financial or in-kind
support to affiliated or unaffiliated hospitals, hospital
affiliates, community clinics, or programs that treat
low-income or underserved individuals; paying for or

10000SB1469ham001 - 41 - LRB100 09786 KTG 43635 a
subsidizing health care professionals who care for
low-income or underserved individuals; providing or
subsidizing outreach or educational services to low-income
or underserved individuals for disease management and
prevention; free or subsidized goods, supplies, or
services needed by low-income or underserved individuals
because of their medical condition; and prenatal or
childbirth outreach to low-income or underserved persons.
(3) Subsidy of State or local governments. Direct or
indirect financial or in-kind subsidies of State or local
governments by the relevant hospital entity that pay for or
subsidize activities or programs related to health care for
low-income or underserved individuals.
(4) Support for State health care programs for
low-income individuals. At the election of the hospital
applicant for each applicable year, either (A) 10% of
payments to the relevant hospital entity and any hospital
affiliate designated by the relevant hospital entity
(provided that such hospital affiliate's operations
provide financial or operational support for or receive
financial or operational support from the relevant
hospital entity) under Medicaid or other means-tested
programs, including, but not limited to, General
Assistance, the Covering ALL KIDS Health Insurance Act, and
the State Children's Health Insurance Program or (B) the
amount of subsidy provided by the relevant hospital entity

10000SB1469ham001 - 42 - LRB100 09786 KTG 43635 a
and any hospital affiliate designated by the relevant
hospital entity (provided that such hospital affiliate's
operations provide financial or operational support for or
receive financial or operational support from the relevant
hospital entity) to State or local government in treating
Medicaid recipients and recipients of means-tested
programs, including but not limited to General Assistance,
the Covering ALL KIDS Health Insurance Act, and the State
Children's Health Insurance Program. The amount of subsidy
for purposes of this item (4) is calculated in the same
manner as unreimbursed costs are calculated for Medicaid
and other means-tested government programs in the Schedule
H of IRS Form 990 in effect on the effective date of this
amendatory Act of the 97th General Assembly.
(5) Dual-eligible subsidy. The amount of subsidy
provided to government by treating dual-eligible
Medicare/Medicaid patients. The amount of subsidy for
purposes of this item (5) is calculated by multiplying the
relevant hospital entity's unreimbursed costs for
Medicare, calculated in the same manner as determined in
the Schedule H of IRS Form 990 in effect on the effective
date of this amendatory Act of the 97th General Assembly,
by the relevant hospital entity's ratio of dual-eligible
patients to total Medicare patients.
(6) Relief of the burden of government related to
health care. Except to the extent otherwise taken into

10000SB1469ham001 - 43 - LRB100 09786 KTG 43635 a
account in this subsection, the portion of unreimbursed
costs of the relevant hospital entity attributable to
providing, paying for, or subsidizing goods, activities,
or services that relieve the burden of government related
to health care for low-income individuals. Such activities
or services shall include, but are not limited to,
providing emergency, trauma, burn, neonatal, psychiatric,
rehabilitation, or other special services; providing
medical education; and conducting medical research or
training of health care professionals. The portion of those
unreimbursed costs attributable to benefiting low-income
individuals shall be determined using the ratio calculated
by adding the relevant hospital entity's costs
attributable to charity care, Medicaid, other means-tested
government programs, Medicare patients with disabilities
under age 65, and dual-eligible Medicare/Medicaid patients
and dividing that total by the relevant hospital entity's
total costs. Such costs for the numerator and denominator
shall be determined by multiplying gross charges by the
cost to charge ratio taken from the hospital's most
recently filed Medicare cost report (CMS 2252-10
Worksheet, Part I). In the case of emergency services, the
ratio shall be calculated using costs (gross charges
multiplied by the cost to charge ratio taken from the
hospital's most recently filed Medicare cost report (CMS
2252-10 Worksheet, Part I)) of patients treated in the

10000SB1469ham001 - 44 - LRB100 09786 KTG 43635 a
relevant hospital entity's emergency department.
(7) Any other activity by the relevant hospital entity
that the Department determines relieves the burden of
government or addresses the health of low-income or
underserved individuals.
(d) The hospital applicant shall include information in its
exemption application establishing that it satisfies the
requirements of subsection (b). For purposes of making the
calculations required by subsection (b), the hospital
applicant may for each year elect to use either (1) the value
of the services or activities listed in subsection (e) for the
hospital year or (2) the average value of those services or
activities for the 3 fiscal years ending with the hospital
year. If the relevant hospital entity has been in operation for
less than 3 completed fiscal years, then the latter
calculation, if elected, shall be performed on a pro rata
basis.
(e) For purposes of making the calculations required by
this Section:
(1) particular services or activities eligible for
consideration under any of the paragraphs (1) through (7)
of subsection (c) may not be counted under more than one of
those paragraphs; and
(2) the amount of unreimbursed costs and the amount of
subsidy shall not be reduced by restricted or unrestricted
payments received by the relevant hospital entity as

10000SB1469ham001 - 45 - LRB100 09786 KTG 43635 a
contributions deductible under Section 170(a) of the
Internal Revenue Code.
(f) (Blank).
(g) Estimation of Exempt Property Tax Liability. The
estimated property tax liability used for the determination in
subsection (b) shall be calculated as follows:
(1) "Estimated property tax liability" means the
estimated dollar amount of property tax that would be owed,
with respect to the exempt portion of each of the relevant
hospital entity's properties that are already fully or
partially exempt, or for which an exemption in whole or in
part is currently being sought, and then aggregated as
applicable, as if the exempt portion of those properties
were subject to tax, calculated with respect to each such
property by multiplying:
(A) the lesser of (i) the actual assessed value, if
any, of the portion of the property for which an
exemption is sought or (ii) an estimated assessed value
of the exempt portion of such property as determined in
item (2) of this subsection (g), by
(B) the applicable State equalization rate
(yielding the equalized assessed value), by
(C) the applicable tax rate.
(2) The estimated assessed value of the exempt portion
of the property equals the sum of (i) the estimated fair
market value of buildings on the property, as determined in

10000SB1469ham001 - 46 - LRB100 09786 KTG 43635 a
accordance with subparagraphs (A) and (B) of this item (2),
multiplied by the applicable assessment factor, and (ii)
the estimated assessed value of the land portion of the
property, as determined in accordance with subparagraph
(C).
(A) The "estimated fair market value of buildings
on the property" means the replacement value of any
exempt portion of buildings on the property, minus
depreciation, determined utilizing the cost
replacement method whereby the exempt square footage
of all such buildings is multiplied by the replacement
cost per square foot for Class A Average building found
in the most recent edition of the Marshall & Swift
Valuation Services Manual, adjusted by any appropriate
current cost and local multipliers.
(B) Depreciation, for purposes of calculating the
estimated fair market value of buildings on the
property, is applied by utilizing a weighted mean life
for the buildings based on original construction and
assuming a 40-year life for hospital buildings and the
applicable life for other types of buildings as
specified in the American Hospital Association
publication "Estimated Useful Lives of Depreciable
Hospital Assets". In the case of hospital buildings,
the remaining life is divided by 40 and this ratio is
multiplied by the replacement cost of the buildings to

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obtain an estimated fair market value of buildings. If
a hospital building is older than 35 years, a remaining
life of 5 years for residual value is assumed; and if a
building is less than 8 years old, a remaining life of
32 years is assumed.
(C) The estimated assessed value of the land
portion of the property shall be determined by
multiplying (i) the per square foot average of the
assessed values of three parcels of land (not including
farm land, and excluding the assessed value of the
improvements thereon) reasonably comparable to the
property, by (ii) the number of square feet comprising
the exempt portion of the property's land square
footage.
(3) The assessment factor, State equalization rate,
and tax rate (including any special factors such as
Enterprise Zones) used in calculating the estimated
property tax liability shall be for the most recent year
that is publicly available from the applicable chief county
assessment officer or officers at least 90 days before the
end of the hospital year.
(4) The method utilized to calculate estimated
property tax liability for purposes of this Section 15-86
shall not be utilized for the actual valuation, assessment,
or taxation of property pursuant to the Property Tax Code.
(h) For the purpose of this Section, the following terms

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shall have the meanings set forth below:
(1) "Hospital" means any institution, place, building,
buildings on a campus, or other health care facility
located in Illinois that is licensed under the Hospital
Licensing Act and has a hospital owner.
(2) "Hospital owner" means a not-for-profit
corporation that is the titleholder of a hospital, or the
owner of the beneficial interest in an Illinois land trust
that is the titleholder of a hospital.
(3) "Hospital affiliate" means any corporation,
partnership, limited partnership, joint venture, limited
liability company, association or other organization,
other than a hospital owner, that directly or indirectly
controls, is controlled by, or is under common control with
one or more hospital owners and that supports, is supported
by, or acts in furtherance of the exempt health care
purposes of at least one of those hospital owners'
hospitals.
(4) "Hospital system" means a hospital and one or more
other hospitals or hospital affiliates related by common
control or ownership.
(5) "Control" relating to hospital owners, hospital
affiliates, or hospital systems means possession, direct
or indirect, of the power to direct or cause the direction
of the management and policies of the entity, whether
through ownership of assets, membership interest, other

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voting or governance rights, by contract or otherwise.
(6) "Hospital applicant" means a hospital owner or
hospital affiliate that files an application for an
exemption or renewal of exemption under this Section.
(7) "Relevant hospital entity" means (A) the hospital
owner, in the case of a hospital applicant that is a
hospital owner, and (B) at the election of a hospital
applicant that is a hospital affiliate, either (i) the
hospital affiliate or (ii) the hospital system to which the
hospital applicant belongs, including any hospitals or
hospital affiliates that are related by common control or
ownership.
(8) "Subject property" means property used for the
calculation under subsection (b) of this Section.
(9) "Hospital year" means the fiscal year of the
relevant hospital entity, or the fiscal year of one of the
hospital owners in the hospital system if the relevant
hospital entity is a hospital system with members with
different fiscal years, that ends in the year for which the
exemption is sought.
(i) It is the intent of the General Assembly that any
exemptions taken, granted, or renewed under this Section prior
to the effective date of this amendatory Act of the 100th
General Assembly are hereby validated.
(Source: P.A. 98-463, eff. 8-16-13; 99-143, eff. 7-27-15.)

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Section 30. The Retailers' Occupation Tax Act is amended by
changing Section 2-9 as follows:
(35 ILCS 120/2-9)
Sec. 2-9. Hospital exemption.
(a) Until July 1, 2022, tangible Tangible personal property
sold to or used by a hospital owner that owns one or more
hospitals licensed under the Hospital Licensing Act or operated
under the University of Illinois Hospital Act, or a hospital
affiliate that is not already exempt under another provision of
this Act and meets the criteria for an exemption under this
Section, is exempt from taxation under this Act.
(b) A hospital owner or hospital affiliate satisfies the
conditions for an exemption under this Section if the value of
qualified services or activities listed in subsection (c) of
this Section for the hospital year equals or exceeds the
relevant hospital entity's estimated property tax liability,
without regard to any property tax exemption granted under
Section 15-86 of the Property Tax Code, for the calendar year
in which exemption or renewal of exemption is sought. For
purposes of making the calculations required by this subsection
(b), if the relevant hospital entity is a hospital owner that
owns more than one hospital, the value of the services or
activities listed in subsection (c) shall be calculated on the
basis of only those services and activities relating to the
hospital that includes the subject property, and the relevant

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hospital entity's estimated property tax liability shall be
calculated only with respect to the properties comprising that
hospital. In the case of a multi-state hospital system or
hospital affiliate, the value of the services or activities
listed in subsection (c) shall be calculated on the basis of
only those services and activities that occur in Illinois and
the relevant hospital entity's estimated property tax
liability shall be calculated only with respect to its property
located in Illinois.
(c) The following services and activities shall be
considered for purposes of making the calculations required by
subsection (b):
(1) Charity care. Free or discounted services provided
pursuant to the relevant hospital entity's financial
assistance policy, measured at cost, including discounts
provided under the Hospital Uninsured Patient Discount
Act.
(2) Health services to low-income and underserved
individuals. Other unreimbursed costs of the relevant
hospital entity for providing without charge, paying for,
or subsidizing goods, activities, or services for the
purpose of addressing the health of low-income or
underserved individuals. Those activities or services may
include, but are not limited to: financial or in-kind
support to affiliated or unaffiliated hospitals, hospital
affiliates, community clinics, or programs that treat

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low-income or underserved individuals; paying for or
subsidizing health care professionals who care for
low-income or underserved individuals; providing or
subsidizing outreach or educational services to low-income
or underserved individuals for disease management and
prevention; free or subsidized goods, supplies, or
services needed by low-income or underserved individuals
because of their medical condition; and prenatal or
childbirth outreach to low-income or underserved persons.
(3) Subsidy of State or local governments. Direct or
indirect financial or in-kind subsidies of State or local
governments by the relevant hospital entity that pay for or
subsidize activities or programs related to health care for
low-income or underserved individuals.
(4) Support for State health care programs for
low-income individuals. At the election of the hospital
applicant for each applicable year, either (A) 10% of
payments to the relevant hospital entity and any hospital
affiliate designated by the relevant hospital entity
(provided that such hospital affiliate's operations
provide financial or operational support for or receive
financial or operational support from the relevant
hospital entity) under Medicaid or other means-tested
programs, including, but not limited to, General
Assistance, the Covering ALL KIDS Health Insurance Act, and
the State Children's Health Insurance Program or (B) the

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amount of subsidy provided by the relevant hospital entity
and any hospital affiliate designated by the relevant
hospital entity (provided that such hospital affiliate's
operations provide financial or operational support for or
receive financial or operational support from the relevant
hospital entity) to State or local government in treating
Medicaid recipients and recipients of means-tested
programs, including but not limited to General Assistance,
the Covering ALL KIDS Health Insurance Act, and the State
Children's Health Insurance Program. The amount of subsidy
for purposes of this item (4) is calculated in the same
manner as unreimbursed costs are calculated for Medicaid
and other means-tested government programs in the Schedule
H of IRS Form 990 in effect on the effective date of this
amendatory Act of the 97th General Assembly.
(5) Dual-eligible subsidy. The amount of subsidy
provided to government by treating dual-eligible
Medicare/Medicaid patients. The amount of subsidy for
purposes of this item (5) is calculated by multiplying the
relevant hospital entity's unreimbursed costs for
Medicare, calculated in the same manner as determined in
the Schedule H of IRS Form 990 in effect on the effective
date of this amendatory Act of the 97th General Assembly,
by the relevant hospital entity's ratio of dual-eligible
patients to total Medicare patients.
(6) Relief of the burden of government related to

10000SB1469ham001 - 54 - LRB100 09786 KTG 43635 a
health care. Except to the extent otherwise taken into
account in this subsection, the portion of unreimbursed
costs of the relevant hospital entity attributable to
providing, paying for, or subsidizing goods, activities,
or services that relieve the burden of government related
to health care for low-income individuals. Such activities
or services shall include, but are not limited to,
providing emergency, trauma, burn, neonatal, psychiatric,
rehabilitation, or other special services; providing
medical education; and conducting medical research or
training of health care professionals. The portion of those
unreimbursed costs attributable to benefiting low-income
individuals shall be determined using the ratio calculated
by adding the relevant hospital entity's costs
attributable to charity care, Medicaid, other means-tested
government programs, Medicare patients with disabilities
under age 65, and dual-eligible Medicare/Medicaid patients
and dividing that total by the relevant hospital entity's
total costs. Such costs for the numerator and denominator
shall be determined by multiplying gross charges by the
cost to charge ratio taken from the hospital's most
recently filed Medicare cost report (CMS 2252-10
Worksheet, Part I). In the case of emergency services, the
ratio shall be calculated using costs (gross charges
multiplied by the cost to charge ratio taken from the
hospital's most recently filed Medicare cost report (CMS

10000SB1469ham001 - 55 - LRB100 09786 KTG 43635 a
2252-10 Worksheet, Part I)) of patients treated in the
relevant hospital entity's emergency department.
(7) Any other activity by the relevant hospital entity
that the Department determines relieves the burden of
government or addresses the health of low-income or
underserved individuals.
(d) The hospital applicant shall include information in its
exemption application establishing that it satisfies the
requirements of subsection (b). For purposes of making the
calculations required by subsection (b), the hospital
applicant may for each year elect to use either (1) the value
of the services or activities listed in subsection (e) for the
hospital year or (2) the average value of those services or
activities for the 3 fiscal years ending with the hospital
year. If the relevant hospital entity has been in operation for
less than 3 completed fiscal years, then the latter
calculation, if elected, shall be performed on a pro rata
basis.
(e) For purposes of making the calculations required by
this Section:
(1) particular services or activities eligible for
consideration under any of the paragraphs (1) through (7)
of subsection (c) may not be counted under more than one of
those paragraphs; and
(2) the amount of unreimbursed costs and the amount of
subsidy shall not be reduced by restricted or unrestricted

10000SB1469ham001 - 56 - LRB100 09786 KTG 43635 a
payments received by the relevant hospital entity as
contributions deductible under Section 170(a) of the
Internal Revenue Code.
(f) (Blank).
(g) Estimation of Exempt Property Tax Liability. The
estimated property tax liability used for the determination in
subsection (b) shall be calculated as follows:
(1) "Estimated property tax liability" means the
estimated dollar amount of property tax that would be owed,
with respect to the exempt portion of each of the relevant
hospital entity's properties that are already fully or
partially exempt, or for which an exemption in whole or in
part is currently being sought, and then aggregated as
applicable, as if the exempt portion of those properties
were subject to tax, calculated with respect to each such
property by multiplying:
(A) the lesser of (i) the actual assessed value, if
any, of the portion of the property for which an
exemption is sought or (ii) an estimated assessed value
of the exempt portion of such property as determined in
item (2) of this subsection (g), by
(B) the applicable State equalization rate
(yielding the equalized assessed value), by
(C) the applicable tax rate.
(2) The estimated assessed value of the exempt portion
of the property equals the sum of (i) the estimated fair

10000SB1469ham001 - 57 - LRB100 09786 KTG 43635 a
market value of buildings on the property, as determined in
accordance with subparagraphs (A) and (B) of this item (2),
multiplied by the applicable assessment factor, and (ii)
the estimated assessed value of the land portion of the
property, as determined in accordance with subparagraph
(C).
(A) The "estimated fair market value of buildings
on the property" means the replacement value of any
exempt portion of buildings on the property, minus
depreciation, determined utilizing the cost
replacement method whereby the exempt square footage
of all such buildings is multiplied by the replacement
cost per square foot for Class A Average building found
in the most recent edition of the Marshall & Swift
Valuation Services Manual, adjusted by any appropriate
current cost and local multipliers.
(B) Depreciation, for purposes of calculating the
estimated fair market value of buildings on the
property, is applied by utilizing a weighted mean life
for the buildings based on original construction and
assuming a 40-year life for hospital buildings and the
applicable life for other types of buildings as
specified in the American Hospital Association
publication "Estimated Useful Lives of Depreciable
Hospital Assets". In the case of hospital buildings,
the remaining life is divided by 40 and this ratio is

10000SB1469ham001 - 58 - LRB100 09786 KTG 43635 a
multiplied by the replacement cost of the buildings to
obtain an estimated fair market value of buildings. If
a hospital building is older than 35 years, a remaining
life of 5 years for residual value is assumed; and if a
building is less than 8 years old, a remaining life of
32 years is assumed.
(C) The estimated assessed value of the land
portion of the property shall be determined by
multiplying (i) the per square foot average of the
assessed values of three parcels of land (not including
farm land, and excluding the assessed value of the
improvements thereon) reasonably comparable to the
property, by (ii) the number of square feet comprising
the exempt portion of the property's land square
footage.
(3) The assessment factor, State equalization rate,
and tax rate (including any special factors such as
Enterprise Zones) used in calculating the estimated
property tax liability shall be for the most recent year
that is publicly available from the applicable chief county
assessment officer or officers at least 90 days before the
end of the hospital year.
(4) The method utilized to calculate estimated
property tax liability for purposes of this Section 15-86
shall not be utilized for the actual valuation, assessment,
or taxation of property pursuant to the Property Tax Code.

10000SB1469ham001 - 59 - LRB100 09786 KTG 43635 a
(h) For the purpose of this Section, the following terms
shall have the meanings set forth below:
(1) "Hospital" means any institution, place, building,
buildings on a campus, or other health care facility
located in Illinois that is licensed under the Hospital
Licensing Act and has a hospital owner.
(2) "Hospital owner" means a not-for-profit
corporation that is the titleholder of a hospital, or the
owner of the beneficial interest in an Illinois land trust
that is the titleholder of a hospital.
(3) "Hospital affiliate" means any corporation,
partnership, limited partnership, joint venture, limited
liability company, association or other organization,
other than a hospital owner, that directly or indirectly
controls, is controlled by, or is under common control with
one or more hospital owners and that supports, is supported
by, or acts in furtherance of the exempt health care
purposes of at least one of those hospital owners'
hospitals.
(4) "Hospital system" means a hospital and one or more
other hospitals or hospital affiliates related by common
control or ownership.
(5) "Control" relating to hospital owners, hospital
affiliates, or hospital systems means possession, direct
or indirect, of the power to direct or cause the direction
of the management and policies of the entity, whether

10000SB1469ham001 - 60 - LRB100 09786 KTG 43635 a
through ownership of assets, membership interest, other
voting or governance rights, by contract or otherwise.
(6) "Hospital applicant" means a hospital owner or
hospital affiliate that files an application for an
exemption or renewal of exemption under this Section.
(7) "Relevant hospital entity" means (A) the hospital
owner, in the case of a hospital applicant that is a
hospital owner, and (B) at the election of a hospital
applicant that is a hospital affiliate, either (i) the
hospital affiliate or (ii) the hospital system to which the
hospital applicant belongs, including any hospitals or
hospital affiliates that are related by common control or
ownership.
(8) "Subject property" means property used for the
calculation under subsection (b) of this Section.
(9) "Hospital year" means the fiscal year of the
relevant hospital entity, or the fiscal year of one of the
hospital owners in the hospital system if the relevant
hospital entity is a hospital system with members with
different fiscal years, that ends in the year for which the
exemption is sought.
(i) It is the intent of the General Assembly that any
exemptions taken, granted, or renewed under this Section prior
to the effective date of this amendatory Act of the 100th
General Assembly are hereby validated.
(Source: P.A. 98-463, eff. 8-16-13; 99-143, eff. 7-27-15.)

10000SB1469ham001 - 61 - LRB100 09786 KTG 43635 a
Section 35. The Specialized Mental Health Rehabilitation
Act of 2013 is amended by changing Sections 2-101 and 4-102 as
follows:
(210 ILCS 49/2-101)
Sec. 2-101. Standards for facilities.
(a) The Department shall, by rule, prescribe minimum
standards for each level of care for facilities to be in place
during the provisional licensure period and thereafter. These
standards shall include, but are not limited to, the following:
(1) life safety standards that will ensure the health,
safety and welfare of residents and their protection from
hazards;
(2) number and qualifications of all personnel,
including management and clinical personnel, having
responsibility for any part of the care given to consumers;
specifically, the Department shall establish staffing
ratios for facilities which shall specify the number of
staff hours per consumer of care that are needed for each
level of care offered within the facility;
(3) all sanitary conditions within the facility and its
surroundings, including water supply, sewage disposal,
food handling, and general hygiene which shall ensure the
health and comfort of consumers;
(4) a program for adequate maintenance of physical

10000SB1469ham001 - 62 - LRB100 09786 KTG 43635 a
plant and equipment;
(5) adequate accommodations, staff, and services for
the number and types of services being offered to consumers
for whom the facility is licensed to care;
(6) development of evacuation and other appropriate
safety plans for use during weather, health, fire, physical
plant, environmental, and national defense emergencies;
(7) maintenance of minimum financial or other
resources necessary to meet the standards established
under this Section, and to operate and conduct the facility
in accordance with this Act; and
(8) standards for coercive free environment,
restraint, and therapeutic separation.
(b) Any requirement contained in administrative rule
concerning a percentage of single occupancy rooms shall be
calculated based on the total number of licensed or
provisionally licensed beds under this Act on January 1, 2019
and shall not be calculated on a per-facility basis.
(Source: P.A. 98-104, eff. 7-22-13.)
(210 ILCS 49/4-102)
Sec. 4-102. Necessity of license. No person may establish,
operate, maintain, offer, or advertise a facility within this
State unless and until he or she obtains a valid license
therefor as hereinafter provided, which license remains
unsuspended, unrevoked, and unexpired. No public official or

10000SB1469ham001 - 63 - LRB100 09786 KTG 43635 a
employee may place any person in, or recommend that any person
be in, or directly or indirectly cause any person to be placed
in any facility that is being operated without a valid license.
All licenses and licensing procedures established under
Article III of the Nursing Home Care Act, except those
contained in Section 3-202, shall be deemed valid under this
Act until the Department establishes licensure. The Department
is granted the authority under this Act to establish
provisional licensure and licensing procedures under this Act
by emergency rule and shall do so within 120 days of the
effective date of this Act. The Department shall not grant a
provisional license to any facility that does not possess a
provisional license on November 30, 2018 and is licensed under
the Nursing Home Care Act on or before November 30, 2018. The
Department shall not grant a license to any facility that has
not first received a provisional license. The changes made by
this amendatory Act of the 100th General Assembly do not apply
to the provisions of subsection (c) of Section 1-101.5
concerning facility closure and relocation.
(Source: P.A. 98-104, eff. 7-22-13.)
Section 40. The Illinois Public Aid Code is amended by
changing Sections 5-5.07, 5A-4, 5A-13, and 14-12 as follows:
(305 ILCS 5/5-5.07)
(Section scheduled to be repealed on January 27, 2019)

10000SB1469ham001 - 64 - LRB100 09786 KTG 43635 a
Sec. 5-5.07. Inpatient psychiatric stay; DCFS per diem
rate. The Department of Children and Family Services shall pay
the DCFS per diem rate for inpatient psychiatric stay at a
free-standing psychiatric hospital effective the 11th day when
a child is in the hospital beyond medical necessity, and the
parent or caregiver has denied the child access to the home and
has refused or failed to make provisions for another living
arrangement for the child or the child's discharge is being
delayed due to a pending inquiry or investigation by the
Department of Children and Family Services. This Section is
repealed on July 1, 2019 6 months after the effective date of
this amendatory Act of the 100th General Assembly.
(Source: P.A. 100-646, eff. 7-27-18.)
(305 ILCS 5/5A-4) (from Ch. 23, par. 5A-4)
Sec. 5A-4. Payment of assessment; penalty.
(a) The assessment imposed by Section 5A-2 for State fiscal
year 2009 through State fiscal year 2018 or as provided in
Section 5A-16, shall be due and payable in monthly
installments, each equaling one-twelfth of the assessment for
the year, on the fourteenth State business day of each month.
No installment payment of an assessment imposed by Section 5A-2
shall be due and payable, however, until after the Comptroller
has issued the payments required under this Article.
Except as provided in subsection (a-5) of this Section, the
assessment imposed by subsection (b-5) of Section 5A-2 for the

10000SB1469ham001 - 65 - LRB100 09786 KTG 43635 a
portion of State fiscal year 2012 beginning June 10, 2012
through June 30, 2012, and for State fiscal year 2013 through
State fiscal year 2018 or as provided in Section 5A-16, shall
be due and payable in monthly installments, each equaling
one-twelfth of the assessment for the year, on the 17th 14th
State business day of each month. No installment payment of an
assessment imposed by subsection (b-5) of Section 5A-2 shall be
due and payable, however, until after: (i) the Department
notifies the hospital provider, in writing, that the payment
methodologies to hospitals required under Section 5A-12.4,
have been approved by the Centers for Medicare and Medicaid
Services of the U.S. Department of Health and Human Services,
and the waiver under 42 CFR 433.68 for the assessment imposed
by subsection (b-5) of Section 5A-2, if necessary, has been
granted by the Centers for Medicare and Medicaid Services of
the U.S. Department of Health and Human Services; and (ii) the
Comptroller has issued the payments required under Section
5A-12.4. Upon notification to the Department of approval of the
payment methodologies required under Section 5A-12.4 and the
waiver granted under 42 CFR 433.68, if necessary, all
installments otherwise due under subsection (b-5) of Section
5A-2 prior to the date of notification shall be due and payable
to the Department upon written direction from the Department
and issuance by the Comptroller of the payments required under
Section 5A-12.4.
Except as provided in subsection (a-5) of this Section, the

10000SB1469ham001 - 66 - LRB100 09786 KTG 43635 a
assessment imposed under Section 5A-2 for State fiscal year
2019 and each subsequent State fiscal year shall be due and
payable in monthly installments, each equaling one-twelfth of
the assessment for the year, on the 14th State business day of
each month. No installment payment of an assessment imposed by
Section 5A-2 shall be due and payable, however, until after:
(i) the Department notifies the hospital provider, in writing,
that the payment methodologies to hospitals required under
Section 5A-12.6 have been approved by the Centers for Medicare
and Medicaid Services of the U.S. Department of Health and
Human Services, and the waiver under 42 CFR 433.68 for the
assessment imposed by Section 5A-2, if necessary, has been
granted by the Centers for Medicare and Medicaid Services of
the U.S. Department of Health and Human Services; and (ii) the
Comptroller has issued the payments required under Section
5A-12.6. Upon notification to the Department of approval of the
payment methodologies required under Section 5A-12.6 and the
waiver granted under 42 CFR 433.68, if necessary, all
installments otherwise due under Section 5A-2 prior to the date
of notification shall be due and payable to the Department upon
written direction from the Department and issuance by the
Comptroller of the payments required under Section 5A-12.6.
(a-5) The Illinois Department may accelerate the schedule
upon which assessment installments are due and payable by
hospitals with a payment ratio greater than or equal to one.
Such acceleration of due dates for payment of the assessment

10000SB1469ham001 - 67 - LRB100 09786 KTG 43635 a
may be made only in conjunction with a corresponding
acceleration in access payments identified in Section 5A-12.2,
Section 5A-12.4, or Section 5A-12.6 to the same hospitals. For
the purposes of this subsection (a-5), a hospital's payment
ratio is defined as the quotient obtained by dividing the total
payments for the State fiscal year, as authorized under Section
5A-12.2, Section 5A-12.4, or Section 5A-12.6, by the total
assessment for the State fiscal year imposed under Section 5A-2
or subsection (b-5) of Section 5A-2.
(b) The Illinois Department is authorized to establish
delayed payment schedules for hospital providers that are
unable to make installment payments when due under this Section
due to financial difficulties, as determined by the Illinois
Department.
(c) If a hospital provider fails to pay the full amount of
an installment when due (including any extensions granted under
subsection (b)), there shall, unless waived by the Illinois
Department for reasonable cause, be added to the assessment
imposed by Section 5A-2 a penalty assessment equal to the
lesser of (i) 5% of the amount of the installment not paid on
or before the due date plus 5% of the portion thereof remaining
unpaid on the last day of each 30-day period thereafter or (ii)
100% of the installment amount not paid on or before the due
date. For purposes of this subsection, payments will be
credited first to unpaid installment amounts (rather than to
penalty or interest), beginning with the most delinquent

10000SB1469ham001 - 68 - LRB100 09786 KTG 43635 a
installments.
(d) Any assessment amount that is due and payable to the
Illinois Department more frequently than once per calendar
quarter shall be remitted to the Illinois Department by the
hospital provider by means of electronic funds transfer. The
Illinois Department may provide for remittance by other means
if (i) the amount due is less than $10,000 or (ii) electronic
funds transfer is unavailable for this purpose.
(Source: P.A. 100-581, eff. 3-12-18.)
(305 ILCS 5/5A-13)
Sec. 5A-13. Emergency rulemaking.
(a) The Department of Healthcare and Family Services
(formerly Department of Public Aid) may adopt rules necessary
to implement this amendatory Act of the 94th General Assembly
through the use of emergency rulemaking in accordance with
Section 5-45 of the Illinois Administrative Procedure Act. For
purposes of that Act, the General Assembly finds that the
adoption of rules to implement this amendatory Act of the 94th
General Assembly is deemed an emergency and necessary for the
public interest, safety, and welfare.
(b) The Department of Healthcare and Family Services may
adopt rules necessary to implement this amendatory Act of the
97th General Assembly through the use of emergency rulemaking
in accordance with Section 5-45 of the Illinois Administrative
Procedure Act. For purposes of that Act, the General Assembly

10000SB1469ham001 - 69 - LRB100 09786 KTG 43635 a
finds that the adoption of rules to implement this amendatory
Act of the 97th General Assembly is deemed an emergency and
necessary for the public interest, safety, and welfare.
(c) The Department of Healthcare and Family Services may
adopt rules necessary to initially implement the changes to
Articles 5, 5A, 12, and 14 of this Code under this amendatory
Act of the 100th General Assembly through the use of emergency
rulemaking in accordance with subsection (aa) of Section 5-45
of the Illinois Administrative Procedure Act. For purposes of
that Act, the General Assembly finds that the adoption of rules
to implement the changes to Articles 5, 5A, 12, and 14 of this
Code under this amendatory Act of the 100th General Assembly is
deemed an emergency and necessary for the public interest,
safety, and welfare. The 24-month limitation on the adoption of
emergency rules does not apply to rules adopted to initially
implement the changes to Articles 5, 5A, 12, and 14 of this
Code under this amendatory Act of the 100th General Assembly.
For purposes of this subsection, "initially" means any
emergency rules necessary to immediately implement the changes
authorized to Articles 5, 5A, 12, and 14 of this Code under
this amendatory Act of the 100th General Assembly; however,
emergency rulemaking authority shall not be used to make
changes that could otherwise be made following the process
established in the Illinois Administrative Procedure Act.
(d) The Department of Healthcare and Family Services may on
a one-time-only basis adopt rules necessary to initially

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implement the changes to Articles 5A and 14 of this Code under
this amendatory Act of the 100th General Assembly through the
use of emergency rulemaking in accordance with subsection (ee)
of Section 5-45 of the Illinois Administrative Procedure Act.
For purposes of that Act, the General Assembly finds that the
adoption of rules on a one-time-only basis to implement the
changes to Articles 5A and 14 of this Code under this
amendatory Act of the 100th General Assembly is deemed an
emergency and necessary for the public interest, safety, and
welfare. The 24-month limitation on the adoption of emergency
rules does not apply to rules adopted to initially implement
the changes to Articles 5A and 14 of this Code under this
amendatory Act of the 100th General Assembly.
(Source: P.A. 100-581, eff. 3-12-18.)
(305 ILCS 5/14-12)
Sec. 14-12. Hospital rate reform payment system. The
hospital payment system pursuant to Section 14-11 of this
Article shall be as follows:
(a) Inpatient hospital services. Effective for discharges
on and after July 1, 2014, reimbursement for inpatient general
acute care services shall utilize the All Patient Refined
Diagnosis Related Grouping (APR-DRG) software, version 30,
distributed by 3MTM Health Information System.
(1) The Department shall establish Medicaid weighting
factors to be used in the reimbursement system established

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under this subsection. Initial weighting factors shall be
the weighting factors as published by 3M Health Information
System, associated with Version 30.0 adjusted for the
Illinois experience.
(2) The Department shall establish a
statewide-standardized amount to be used in the inpatient
reimbursement system. The Department shall publish these
amounts on its website no later than 10 calendar days prior
to their effective date.
(3) In addition to the statewide-standardized amount,
the Department shall develop adjusters to adjust the rate
of reimbursement for critical Medicaid providers or
services for trauma, transplantation services, perinatal
care, and Graduate Medical Education (GME).
(4) The Department shall develop add-on payments to
account for exceptionally costly inpatient stays,
consistent with Medicare outlier principles. Outlier fixed
loss thresholds may be updated to control for excessive
growth in outlier payments no more frequently than on an
annual basis, but at least triennially. Upon updating the
fixed loss thresholds, the Department shall be required to
update base rates within 12 months.
(5) The Department shall define those hospitals or
distinct parts of hospitals that shall be exempt from the
APR-DRG reimbursement system established under this
Section. The Department shall publish these hospitals'

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inpatient rates on its website no later than 10 calendar
days prior to their effective date.
(6) Beginning July 1, 2014 and ending on June 30, 2024,
in addition to the statewide-standardized amount, the
Department shall develop an adjustor to adjust the rate of
reimbursement for safety-net hospitals defined in Section
5-5e.1 of this Code excluding pediatric hospitals.
(7) Beginning July 1, 2014 and ending on June 30, 2020,
or upon implementation of inpatient psychiatric rate
increases as described in subsection (n) of Section
5A-12.6, in addition to the statewide-standardized amount,
the Department shall develop an adjustor to adjust the rate
of reimbursement for Illinois freestanding inpatient
psychiatric hospitals that are not designated as
children's hospitals by the Department but are primarily
treating patients under the age of 21.
(7.5) Beginning July 1, 2020, the reimbursement for
inpatient psychiatric services shall be so that base claims
projected reimbursement is increased by an amount equal to
the funds allocated in paragraph (2) of subsection (b) of
Section 5A-12.6, less the amount allocated under
paragraphs (8) and (9) of this subsection and paragraphs
(3) and (4) of subsection (b) multiplied by 13%. Beginning
July 1, 2022, the reimbursement for inpatient psychiatric
services shall be so that base claims projected
reimbursement is increased by an amount equal to the funds

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allocated in paragraph (3) of subsection (b) of Section
5A-12.6, less the amount allocated under paragraphs (8) and
(9) of this subsection and paragraphs (3) and (4) of
subsection (b) multiplied by 13%. Beginning July 1, 2024,
the reimbursement for inpatient psychiatric services shall
be so that base claims projected reimbursement is increased
by an amount equal to the funds allocated in paragraph (4)
of subsection (b) of Section 5A-12.6, less the amount
allocated under paragraphs (8) and (9) of this subsection
and paragraphs (3) and (4) of subsection (b) multiplied by
13%.
(8) Beginning July 1, 2018, in addition to the
statewide-standardized amount, the Department shall adjust
the rate of reimbursement for hospitals designated by the
Department of Public Health as a Perinatal Level II or II+
center by applying the same adjustor that is applied to
Perinatal and Obstetrical care cases for Perinatal Level
III centers, as of December 31, 2017.
(9) Beginning July 1, 2018, in addition to the
statewide-standardized amount, the Department shall apply
the same adjustor that is applied to trauma cases as of
December 31, 2017 to inpatient claims to treat patients
with burns, including, but not limited to, APR-DRGs 841,
842, 843, and 844.
(10) Beginning July 1, 2018, the
statewide-standardized amount for inpatient general acute

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care services shall be uniformly increased so that base
claims projected reimbursement is increased by an amount
equal to the funds allocated in paragraph (1) of subsection
(b) of Section 5A-12.6, less the amount allocated under
paragraphs (8) and (9) of this subsection and paragraphs
(3) and (4) of subsection (b) multiplied by 40%. Beginning
July 1, 2020, the statewide-standardized amount for
inpatient general acute care services shall be uniformly
increased so that base claims projected reimbursement is
increased by an amount equal to the funds allocated in
paragraph (2) of subsection (b) of Section 5A-12.6, less
the amount allocated under paragraphs (8) and (9) of this
subsection and paragraphs (3) and (4) of subsection (b)
multiplied by 40%. Beginning July 1, 2022, the
statewide-standardized amount for inpatient general acute
care services shall be uniformly increased so that base
claims projected reimbursement is increased by an amount
equal to the funds allocated in paragraph (3) of subsection
(b) of Section 5A-12.6, less the amount allocated under
paragraphs (8) and (9) of this subsection and paragraphs
(3) and (4) of subsection (b) multiplied by 40%. Beginning
July 1, 2023 the statewide-standardized amount for
inpatient general acute care services shall be uniformly
increased so that base claims projected reimbursement is
increased by an amount equal to the funds allocated in
paragraph (4) of subsection (b) of Section 5A-12.6, less

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the amount allocated under paragraphs (8) and (9) of this
subsection and paragraphs (3) and (4) of subsection (b)
multiplied by 40%.
(11) Beginning July 1, 2018, the reimbursement for
inpatient rehabilitation services shall be increased by
the addition of a $96 per day add-on.
Beginning July 1, 2020, the reimbursement for
inpatient rehabilitation services shall be uniformly
increased so that the $96 per day add-on is increased by an
amount equal to the funds allocated in paragraph (2) of
subsection (b) of Section 5A-12.6, less the amount
allocated under paragraphs (8) and (9) of this subsection
and paragraphs (3) and (4) of subsection (b) multiplied by
0.9%.
Beginning July 1, 2022, the reimbursement for
inpatient rehabilitation services shall be uniformly
increased so that the $96 per day add-on as adjusted by the
July 1, 2020 increase, is increased by an amount equal to
the funds allocated in paragraph (3) of subsection (b) of
Section 5A-12.6, less the amount allocated under
paragraphs (8) and (9) of this subsection and paragraphs
(3) and (4) of subsection (b) multiplied by 0.9%.
Beginning July 1, 2023, the reimbursement for
inpatient rehabilitation services shall be uniformly
increased so that the $96 per day add-on as adjusted by the
July 1, 2022 increase, is increased by an amount equal to

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the funds allocated in paragraph (4) of subsection (b) of
Section 5A-12.6, less the amount allocated under
paragraphs (8) and (9) of this subsection and paragraphs
(3) and (4) of subsection (b) multiplied by 0.9%.
(b) Outpatient hospital services. Effective for dates of
service on and after July 1, 2014, reimbursement for outpatient
services shall utilize the Enhanced Ambulatory Procedure
Grouping (EAPG E-APG) software, version 3.7 distributed by 3MTM
Health Information System.
(1) The Department shall establish Medicaid weighting
factors to be used in the reimbursement system established
under this subsection. The initial weighting factors shall
be the weighting factors as published by 3M Health
Information System, associated with Version 3.7.
(2) The Department shall establish service specific
statewide-standardized amounts to be used in the
reimbursement system.
(A) The initial statewide standardized amounts,
with the labor portion adjusted by the Calendar Year
2013 Medicare Outpatient Prospective Payment System
wage index with reclassifications, shall be published
by the Department on its website no later than 10
calendar days prior to their effective date.
(B) The Department shall establish adjustments to
the statewide-standardized amounts for each Critical
Access Hospital, as designated by the Department of

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Public Health in accordance with 42 CFR 485, Subpart F.
For outpatient services provided on or before June 30,
2018, the The EAPG standardized amounts are determined
separately for each critical access hospital such that
simulated EAPG payments using outpatient base period
paid claim data plus payments under Section 5A-12.4 of
this Code net of the associated tax costs are equal to
the estimated costs of outpatient base period claims
data with a rate year cost inflation factor applied.
(3) In addition to the statewide-standardized amounts,
the Department shall develop adjusters to adjust the rate
of reimbursement for critical Medicaid hospital outpatient
providers or services, including outpatient high volume or
safety-net hospitals. Beginning July 1, 2018, the
outpatient high volume adjustor shall be increased to
increase annual expenditures associated with this adjustor
by $79,200,000, based on the State Fiscal Year 2015 base
year data and this adjustor shall apply to public
hospitals, except for large public hospitals, as defined
under 89 Ill. Adm. Code 148.25(a).
(4) Beginning July 1, 2018, in addition to the
statewide standardized amounts, the Department shall make
an add-on payment for outpatient expensive devices and
drugs. This add-on payment shall at least apply to claim
lines that: (i) are assigned with one of the following
EAPGs: 490, 1001 to 1020, and coded with one of the

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following revenue codes: 0274 to 0276, 0278; or (ii) are
assigned with one of the following EAPGs: 430 to 441, 443,
444, 460 to 465, 495, 496, 1090. The add-on payment shall
be calculated as follows: the claim line's covered charges
multiplied by the hospital's total acute cost to charge
ratio, less the claim line's EAPG payment plus $1,000,
multiplied by 0.8.
(5) Beginning July 1, 2018, the statewide-standardized
amounts for outpatient services shall be increased by a
uniform percentage so that base claims projected
reimbursement is increased by an amount equal to no less
than the funds allocated in paragraph (1) of subsection (b)
of Section 5A-12.6, less the amount allocated under
paragraphs (8) and (9) of subsection (a) and paragraphs (3)
and (4) of this subsection multiplied by 46%. Beginning
July 1, 2020, the statewide-standardized amounts for
outpatient services shall be increased by a uniform
percentage so that base claims projected reimbursement is
increased by an amount equal to no less than the funds
allocated in paragraph (2) of subsection (b) of Section
5A-12.6, less the amount allocated under paragraphs (8) and
(9) of subsection (a) and paragraphs (3) and (4) of this
subsection multiplied by 46%. Beginning July 1, 2022, the
statewide-standardized amounts for outpatient services
shall be increased by a uniform percentage so that base
claims projected reimbursement is increased by an amount

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equal to the funds allocated in paragraph (3) of subsection
(b) of Section 5A-12.6, less the amount allocated under
paragraphs (8) and (9) of subsection (a) and paragraphs (3)
and (4) of this subsection multiplied by 46%. Beginning
July 1, 2023, the statewide-standardized amounts for
outpatient services shall be increased by a uniform
percentage so that base claims projected reimbursement is
increased by an amount equal to no less than the funds
allocated in paragraph (4) of subsection (b) of Section
5A-12.6, less the amount allocated under paragraphs (8) and
(9) of subsection (a) and paragraphs (3) and (4) of this
subsection multiplied by 46%.
(6) Effective for dates of service on or after July 1,
2018, the Department shall establish adjustments to the
statewide-standardized amounts for each Critical Access
Hospital, as designated by the Department of Public Health
in accordance with 42 CFR 485, Subpart F, such that each
Critical Access Hospital's standardized amount for
outpatient services shall be increased by the applicable
uniform percentage determined pursuant to paragraph (5) of
this subsection. It is the intent of the General Assembly
that the adjustments required under this paragraph (6) by
this amendatory Act of the 100th General Assembly shall be
applied retroactively to claims for dates of service
provided on or after July 1, 2018.
(7) Effective for dates of service on or after the

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effective date of this amendatory Act of the 100th General
Assembly, the Department shall recalculate and implement
an updated statewide-standardized amount for outpatient
services provided by hospitals that are not Critical Access
Hospitals to reflect the applicable uniform percentage
determined pursuant to paragraph (5).
(1) Any recalculation to the
statewide-standardized amounts for outpatient services
provided by hospitals that are not Critical Access
Hospitals shall be the amount necessary to achieve the
increase in the statewide-standardized amounts for
outpatient services increased by a uniform percentage,
so that base claims projected reimbursement is
increased by an amount equal to no less than the funds
allocated in paragraph (1) of subsection (b) of Section
5A-12.6, less the amount allocated under paragraphs
(8) and (9) of subsection (a) and paragraphs (3) and
(4) of this subsection, for all hospitals that are not
Critical Access Hospitals, multiplied by 46%.
(2) It is the intent of the General Assembly that
the recalculations required under this paragraph (7)
by this amendatory Act of the 100th General Assembly
shall be applied prospectively to claims for dates of
service provided on or after the effective date of this
amendatory Act of the 100th General Assembly and that
no recoupment or repayment by the Department or an MCO,

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of payments attributable to recalculation under this
paragraph (7), issued to the hospital for dates of
service on or after July 1, 2018 and before the
effective date of this amendatory Act of the 100th
General Assembly shall be permitted.
(8) The Department shall ensure that all necessary
adjustments to the managed care organization capitation
base rates necessitated by the adjustments under
subparagraph (6) or (7) of this subsection are completed
and applied retroactively in accordance with Section
5-30.8 of this Code within 90 days of the effective date of
this amendatory Act of the 100th General Assembly.
(c) In consultation with the hospital community, the
Department is authorized to replace 89 Ill. Admin. Code 152.150
as published in 38 Ill. Reg. 4980 through 4986 within 12 months
of June 16, 2014 (the effective date of Public Act 98-651) this
amendatory Act of the 98th General Assembly. If the Department
does not replace these rules within 12 months of June 16, 2014
(the effective date of Public Act 98-651) this amendatory Act
of the 98th General Assembly, the rules in effect for 152.150
as published in 38 Ill. Reg. 4980 through 4986 shall remain in
effect until modified by rule by the Department. Nothing in
this subsection shall be construed to mandate that the
Department file a replacement rule.
(d) Transition period. There shall be a transition period
to the reimbursement systems authorized under this Section that

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shall begin on the effective date of these systems and continue
until June 30, 2018, unless extended by rule by the Department.
To help provide an orderly and predictable transition to the
new reimbursement systems and to preserve and enhance access to
the hospital services during this transition, the Department
shall allocate a transitional hospital access pool of at least
$290,000,000 annually so that transitional hospital access
payments are made to hospitals.
(1) After the transition period, the Department may
begin incorporating the transitional hospital access pool
into the base rate structure; however, the transitional
hospital access payments in effect on June 30, 2018 shall
continue to be paid, if continued under Section 5A-16.
(2) After the transition period, if the Department
reduces payments from the transitional hospital access
pool, it shall increase base rates, develop new adjustors,
adjust current adjustors, develop new hospital access
payments based on updated information, or any combination
thereof by an amount equal to the decreases proposed in the
transitional hospital access pool payments, ensuring that
the entire transitional hospital access pool amount shall
continue to be used for hospital payments.
(d-5) Hospital transformation program. The Department, in
conjunction with the Hospital Transformation Review Committee
created under subsection (d-5), shall develop a hospital
transformation program to provide financial assistance to

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hospitals in transforming their services and care models to
better align with the needs of the communities they serve. The
payments authorized in this Section shall be subject to
approval by the federal government.
(1) Phase 1. In State fiscal years 2019 through 2020,
the Department shall allocate funds from the transitional
access hospital pool to create a hospital transformation
pool of at least $262,906,870 annually and make hospital
transformation payments to hospitals. Subject to Section
5A-16, in State fiscal years 2019 and 2020, an Illinois
hospital that received either a transitional hospital
access payment under subsection (d) or a supplemental
payment under subsection (f) of this Section in State
fiscal year 2018, shall receive a hospital transformation
payment as follows:
(A) If the hospital's Rate Year 2017 Medicaid
inpatient utilization rate is equal to or greater than
45%, the hospital transformation payment shall be
equal to 100% of the sum of its transitional hospital
access payment authorized under subsection (d) and any
supplemental payment authorized under subsection (f).
(B) If the hospital's Rate Year 2017 Medicaid
inpatient utilization rate is equal to or greater than
25% but less than 45%, the hospital transformation
payment shall be equal to 75% of the sum of its
transitional hospital access payment authorized under

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subsection (d) and any supplemental payment authorized
under subsection (f).
(C) If the hospital's Rate Year 2017 Medicaid
inpatient utilization rate is less than 25%, the
hospital transformation payment shall be equal to 50%
of the sum of its transitional hospital access payment
authorized under subsection (d) and any supplemental
payment authorized under subsection (f).
(2) Phase 2. During State fiscal years 2021 and 2022,
the Department shall allocate funds from the transitional
access hospital pool to create a hospital transformation
pool annually and make hospital transformation payments to
hospitals participating in the transformation program. Any
hospital may seek transformation funding in Phase 2. Any
hospital that seeks transformation funding in Phase 2 to
update or repurpose the hospital's physical structure to
transition to a new delivery model, must submit to the
Department in writing a transformation plan, based on the
Department's guidelines, that describes the desired
delivery model with projections of patient volumes by
service lines and projected revenues, expenses, and net
income that correspond to the new delivery model. In Phase
2, subject to the approval of rules, the Department may use
the hospital transformation pool to increase base rates,
develop new adjustors, adjust current adjustors, or
develop new access payments in order to support and

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incentivize hospitals to pursue such transformation. In
developing such methodologies, the Department shall ensure
that the entire hospital transformation pool continues to
be expended to ensure access to hospital services or to
support organizations that had received hospital
transformation payments under this Section.
(A) Any hospital participating in the hospital
transformation program shall provide an opportunity
for public input by local community groups, hospital
workers, and healthcare professionals and assist in
facilitating discussions about any transformations or
changes to the hospital.
(B) As provided in paragraph (9) of Section 3 of
the Illinois Health Facilities Planning Act, any
hospital participating in the transformation program
may be excluded from the requirements of the Illinois
Health Facilities Planning Act for those projects
related to the hospital's transformation. To be
eligible, the hospital must submit to the Health
Facilities and Services Review Board certification
from the Department, approved by the Hospital
Transformation Review Committee, that the project is a
part of the hospital's transformation.
(C) As provided in subsection (a-20) of Section
32.5 of the Emergency Medical Services (EMS) Systems
Act, a hospital that received hospital transformation

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payments under this Section may convert to a
freestanding emergency center. To be eligible for such
a conversion, the hospital must submit to the
Department of Public Health certification from the
Department, approved by the Hospital Transformation
Review Committee, that the project is a part of the
hospital's transformation.
(3) By April 1, 2019 Within 6 months after the
effective date of this amendatory Act of the 100th General
Assembly, the Department, in conjunction with the Hospital
Transformation Review Committee, shall develop and file as
an administrative rule with the Secretary of State adopt,
by rule, the goals, objectives, policies, standards,
payment models, or criteria to be applied in Phase 2 of the
program to allocate the hospital transformation funds. The
goals, objectives, and policies to be considered may
include, but are not limited to, achieving unmet needs of a
community that a hospital serves such as behavioral health
services, outpatient services, or drug rehabilitation
services; attaining certain quality or patient safety
benchmarks for health care services; or improving the
coordination, effectiveness, and efficiency of care
delivery. Notwithstanding any other provision of law, any
rule adopted in accordance with this subsection (d-5) may
be submitted to the Joint Committee on Administrative Rules
for approval only if the rule has first been approved by 9

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of the 14 members of the Hospital Transformation Review
Committee.
(4) Hospital Transformation Review Committee. There is
created the Hospital Transformation Review Committee. The
Committee shall consist of 14 members. No later than 30
days after March 12, 2018 (the effective date of Public Act
100-581) this amendatory Act of the 100th General Assembly,
the 4 legislative leaders shall each appoint 3 members; the
Governor shall appoint the Director of Healthcare and
Family Services, or his or her designee, as a member; and
the Director of Healthcare and Family Services shall
appoint one member. Any vacancy shall be filled by the
applicable appointing authority within 15 calendar days.
The members of the Committee shall select a Chair and a
Vice-Chair from among its members, provided that the Chair
and Vice-Chair cannot be appointed by the same appointing
authority and must be from different political parties. The
Chair shall have the authority to establish a meeting
schedule and convene meetings of the Committee, and the
Vice-Chair shall have the authority to convene meetings in
the absence of the Chair. The Committee may establish its
own rules with respect to meeting schedule, notice of
meetings, and the disclosure of documents; however, the
Committee shall not have the power to subpoena individuals
or documents and any rules must be approved by 9 of the 14
members. The Committee shall perform the functions

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described in this Section and advise and consult with the
Director in the administration of this Section. In addition
to reviewing and approving the policies, procedures, and
rules for the hospital transformation program, the
Committee shall consider and make recommendations related
to qualifying criteria and payment methodologies related
to safety-net hospitals and children's hospitals. Members
of the Committee appointed by the legislative leaders shall
be subject to the jurisdiction of the Legislative Ethics
Commission, not the Executive Ethics Commission, and all
requests under the Freedom of Information Act shall be
directed to the applicable Freedom of Information officer
for the General Assembly. The Department shall provide
operational support to the Committee as necessary. The
Committee is dissolved on April 1, 2019.
(e) Beginning 36 months after initial implementation, the
Department shall update the reimbursement components in
subsections (a) and (b), including standardized amounts and
weighting factors, and at least triennially and no more
frequently than annually thereafter. The Department shall
publish these updates on its website no later than 30 calendar
days prior to their effective date.
(f) Continuation of supplemental payments. Any
supplemental payments authorized under Illinois Administrative
Code 148 effective January 1, 2014 and that continue during the
period of July 1, 2014 through December 31, 2014 shall remain

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in effect as long as the assessment imposed by Section 5A-2
that is in effect on December 31, 2017 remains in effect.
(g) Notwithstanding subsections (a) through (f) of this
Section and notwithstanding the changes authorized under
Section 5-5b.1, any updates to the system shall not result in
any diminishment of the overall effective rates of
reimbursement as of the implementation date of the new system
(July 1, 2014). These updates shall not preclude variations in
any individual component of the system or hospital rate
variations. Nothing in this Section shall prohibit the
Department from increasing the rates of reimbursement or
developing payments to ensure access to hospital services.
Nothing in this Section shall be construed to guarantee a
minimum amount of spending in the aggregate or per hospital as
spending may be impacted by factors including but not limited
to the number of individuals in the medical assistance program
and the severity of illness of the individuals.
(h) The Department shall have the authority to modify by
rulemaking any changes to the rates or methodologies in this
Section as required by the federal government to obtain federal
financial participation for expenditures made under this
Section.
(i) Except for subsections (g) and (h) of this Section, the
Department shall, pursuant to subsection (c) of Section 5-40 of
the Illinois Administrative Procedure Act, provide for
presentation at the June 2014 hearing of the Joint Committee on

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Administrative Rules (JCAR) additional written notice to JCAR
of the following rules in order to commence the second notice
period for the following rules: rules published in the Illinois
Register, rule dated February 21, 2014 at 38 Ill. Reg. 4559
(Medical Payment), 4628 (Specialized Health Care Delivery
Systems), 4640 (Hospital Services), 4932 (Diagnostic Related
Grouping (DRG) Prospective Payment System (PPS)), and 4977
(Hospital Reimbursement Changes), and published in the
Illinois Register dated March 21, 2014 at 38 Ill. Reg. 6499
(Specialized Health Care Delivery Systems) and 6505 (Hospital
Services).
(j) Out-of-state hospitals. Beginning July 1, 2018, for
purposes of determining for State fiscal years 2019 and 2020
the hospitals eligible for the payments authorized under
subsections (a) and (b) of this Section, the Department shall
include out-of-state hospitals that are designated a Level I
pediatric trauma center or a Level I trauma center by the
Department of Public Health as of December 1, 2017.
(k) The Department shall notify each hospital and managed
care organization, in writing, of the impact of the updates
under this Section at least 30 calendar days prior to their
effective date.
(Source: P.A. 99-2, eff. 3-26-15; 100-581, eff. 3-12-18;
revised 10-3-18.)
Section 97. Severability. The provisions of this Act are

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severable under Section 1.31 of the Statute on Statutes.
Section 99. Effective date. This Act takes effect upon
becoming law.".